Union government hikes windfall tax on petroleum crude

New Delhi: The Union government has hiked the windfall tax on crude petroleum to Rs 10,000 rupees ($120.36) per ton from 6,700 rupees. The new rate will come into effect from today September 16. The government also slashed the windfall tax on aviation turbine fuel to 3.50 rupees per litre from 4 rupees. The levy on diesel has been cut to 5.50 rupees per litre from 6 rupees. On September 1, the government cut the windfall tax on petroleum crude to 6,700 rupees per ton from 7,100 rupees.

India is the world’s largest consumer and importer of crude oil. The Union government in July last year imposed the windfall tax on crude oil producers and levies on exports of petrol, diesel and aviation fuel. Windfall tax is levied as a special additional excise duty which is aimed at absorbing the super-profits earned by domestic crude oil producers due to high global crude, product prices. The Union government reviews the windfall tax and associated rates in a fortnightly manner.

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Crude oil pumped out of the ground and from below the seabed is refined and converted into fuels like petrol, diesel, and aviation turbine fuel (ATF).