Windfall Tax: Government of India has reduced tax from diesel, know will it affect your pocket? Windfall Tax: Government cut Windfall tax on domestic crude oil Diesel ATF

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 Windfall Tax: Government of India has reduced tax from diesel, know will it affect your pocket?  Windfall Tax: Government cut Windfall tax on domestic crude oil Diesel ATF


Photo:FILE Diesel Tax Cut

Highlights

  • Government cuts tax rates on crude oil produced in India
  • Crude oil prices fall to six-month low
  • The government had implemented this system from July.

Windfall Tax: The government has once again changed the rates of windfall tax. Under this, the government cut the tax rates on crude oil produced in India. At the same time, the duty on the export of diesel and aviation fuel (ATF) has also been reduced. This decision has been taken in view of the declining crude oil prices in the international markets. But if you are thinking that this will save your pocket, then you are wrong, because this tax is levied on the oil exported from India, in which the refinery will also get its benefit. The government had imposed windfall tax on petrol, diesel and ATF exported from India from July this year.

now how much tax

The government had implemented this system from July. Which is reviewed every 15 days. In the fifth fortnight review, the government reduced the tax on domestically produced crude oil from Rs 13,300 per tonne to Rs 10,500 per tonne. Apart from this, the duty on export of diesel has been reduced from Rs 13.5 per liter to Rs 10 per litre. Also, duty on export of aircraft fuel has been reduced from Rs 9 per liter to Rs 5 per litre. The new rates will come into effect from September 17.

Decision taken due to falling crude oil prices

Crude oil prices in the international market have come down to a six-month low. Due to this, windfall tax i.e. windfall tax has been reduced. The average price of crude oil bought by India stood at $ 92.67 a barrel in September from $ 97.40 a barrel in the previous month.

The system was implemented from July

On July 1, the government had imposed an export duty of Rs 6 per liter on petrol and ATF and Rs 13 per liter on diesel. Besides, windfall tax of Rs 23,250 per tonne was imposed on domestic crude oil production. With this, India joined the countries that were taxing windfall gains to energy companies. However, since then the prices of crude oil in the international market have softened. This affected the profit margins of both oil producers and refineries.

Relief on domestic crude oil production

The tax on domestically produced crude oil was reduced from Rs 13,300 per tonne to Rs 10,500 per tonne. The government on August 2 reduced the tax on export of diesel from Rs 11 to Rs 5 per litre. At the same time, it has been decided to end it on ATF. Similarly, zero tax on export of petrol continued but the tax on domestically produced crude was increased from Rs 17,000 per tonne to Rs 17,750 per tonne.

Why was the tax imposed?

While imposing this tax on July 1, the government had said that the tax on exports was imposed to prevent the increase in the retail price of petrol diesel in the domestic market due to the wildly rising prices of crude oil in the global market. This was aimed at getting the companies to consume the refined fuel in the domestic market instead of exporting it here, so that the supply could be better and the prices could be reduced. Since the implementation of this additional tax, oil companies were opposing it.

Profit or loss to only 2 companies

This decision of the government will benefit or harm companies exporting refined fuel like Reliance. Apart from this, Rosneft’s company Naira Energy will also be affected by the new decision. Together these two companies export about 85 per cent of the fuel.

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