The central government has reduced windfall tax on crude oil produced in the country to zero. It has been reduced from 4,100 per tonne to nil now. Along with this move, the zero rate of tax on the export of diesel and aviation fuel (ATF) has been continued. The new rates have come into effect from Tuesday.
As the name suggests, windfall tax is a relatively higher tax, which is levied by the government on specific industries or products, when they experience unexpectedly high or above-average profits. In case of a dramatic or unanticipated increase in profits, government imposes this tax.
According to a notification issued by the government, this is the second time the Special Additional Excise Duty (SAED) for domestically produced oil has been reduced to zero. This levy was introduced in July last year.
Earlier on May 2, the government had reduced the windfall tax on crude oil from 6,400 per tonne to 4,100 per tonne. At the same time, the levy on the export of petrol and diesel was reduced to zero, which remains at the same level. Similarly, the levy on the export of aviation turbine fuel (ATF) also remains nil.
The government introduced a windfall tax on domestically produced crude oil from July 1, last year. The price of crude oil in the international market has come down to around $76 per barrel, after which the windfall tax on domestic crude oil has been cut. The government reviews the windfall tax every 15 days.
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