GOI cuts windfall profit tax on crude oil

GOI cuts windfall profit tax on crude oil

The Government of India cut the windfall profit tax on domestically produced crude oil and also reduced the levy on diesel. The revised tax rates become effective from December 16, 2022.

Government of India released its official notification in which it is stated that, the tax on crude oil production made by firms such as the state-owned Oil and Natural Gas Corporation (ONGC) has been cut down to Rs 1,700 per tonne from the existing Rs 4,900 per tone.

In the fortnightly revision of the windfall profit tax, the government reduced the rate on export of diesel to Rs 5 per litre from Rs 8 per litre. The levy on crude includes Rs 1.5 per litre as road infrastructure cess.

Windfall tax on ATF:

In recent notification, the windfall tax on aviation turbine fuel has been cut down from Rs 5 per litre from to Rs 1.5 per litre. ATF- aviation turbine fuel is the crude which used in aviation industry.

The cut of windfall tax on aviation turbine fuel encourages aviation industry to fly on high in near future.

The government has been reviewing the windfall tax almost every two weeks since its introduction. After the latest revision, the tax on oil produced from domestic fields is slashed by about 65%.

Windfall profit tax is measured by taking away any price that producers are getting above a threshold.

Introduction of windfall profit tax:

India first levied windfall profit taxes on July 1 this year after joining a growing number of nations that tax super normal profits of energy companies.

At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were imposed on petrol and ATF and Rs 13 a litre (USD 26 a barrel) on diesel. A Rs 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was also collected.

Earlier on December 1, the Centre has slashed the windfall tax on sale of domestic crude oil to ₹4,900 per tonne from the current tax of ₹10,200 crore.

Question & Answer:

Q1. The central government has slashed the windfall profit tax from which time of period?

Ans. 16th December

Q2. Which oil marketing company has cut down the windfall profit tax to Rs.17000 per tone?

Ans. Oil and Natural Gas Corporation

Q3. What is the full form of ‘ATF’ and where it is used?

Ans. ATF- Aviation Turbine Fuel, it is used in aviation industry to fuel airplanes and other air vehicles

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