The government on Wednesday hiked the windfall tax on domestically produced crude oil while reducing the rate on the export of diesel.
Tax on crude oil from firms such as state-owned ONGC went from ₹9,500 per tonne to ₹10,200 per tonne w.e.f November 17, as per government circular.
In the fortnightly revision of the windfall tax, the government cut the rate on the export of diesel to ₹10.5 per litre, from ₹13 per litre. The levy on diesel includes ₹1.50 per litre road infrastructure cess.
The export tax on jet fuel or ATF, which was set at ₹5 a litre in the last review on November 1, has not been changed for now.
With the introduction of the levy, a windfall tax on petrol export along with diesel & ATF too was levied. However, the tax on petrol was scrapped afterwards.
While the windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference of the international oil price realised and the cost.
On the 1st of July, windfall profit taxes were imposed in the country for the first time- joining the list of nations that tax nominal profits of energy firms. At that time, export duties of ₹6 per litre ($12 per barrel) each were levied on petrol and aviation turbine fuel and ₹13 a litre ($26 a barrel) on diesel. A ₹23,250 per tonne ($40 per barrel) windfall profit tax on domestic crude production was also levied.
The duties were partially adjusted in the previous rounds on July 20, August 2, August 19, September 1, September 16, October 1, October 16 and November 1.
