New Delhi: The union government has lowered the windfall tax on crude petroleum and jet fuel. The windfall tax on crude petroleum has been reduced from Rs 6,300/tonne to Rs 5,000/tone. The levy on jet fuel has been eased to Rs 1.06 lakh per kilo litre (kL) from Rs 1.11 lakh/kL.
Earlier on November 16, the government slashed the windfall tax on crude petroleum by Rs 3,500 from Rs 9,800 per tonne to Rs 6,300 per tonne. This was in line with the downward trend in global oil prices. Before this, on November 1, the government raised the tax on crude oil from Rs 9,050 per tonne to Rs 9,800 per tonne. Subsequently, the duty on diesel exports was reduced by half to Rs 2/litre, while the levy on jet fuel was eliminated, bringing it down from Rs 1/litre to nil.
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).
A windfall tax is imposed on domestically produced crude oil when the rates of the global benchmark exceed $75 per barrel. For the export of diesel, aviation turbine fuel (ATF), and petrol, the levy is applicable when the product cracks, or margins, surpass $20 per barrel.
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