Windfall Tax: Relief on diesel and crude oil, government again reduced windfall tax – this will be its effect

Windfall Tax: Relief on diesel and crude oil, government again reduced windfall tax – this will be its effect

Windfall Tax: The Central Government has reduced the windfall tax on crude oil and some other petroleum products for the third consecutive time. In the review meeting regarding the tax on export of petroleum products, the government has reduced the windfall tax on crude oil and diesel produced in the country. This tax is taken in the form of Special Additional Excise Duty (SAED).

How much has the windfall tax been reduced?

Crude oil produced in the country. But the windfall tax has been reduced from Rs 5000 per tonne to Rs 1300 per tonne. That means, a direct relief of Rs 3700 per tonne has been given on this additional tax. In the official notification issued by the government, it has also been informed that the additional excise duty on diesel has been reduced from Re 1 per tonne to 50 paise per tonne.

ATF Tax increased

On one hand the government has given relief and on the other hand it has also increased the tax. Tax on aviation turbine fuel or jet fuel has been increased. It has been increased to Re 1 whereas earlier there was zero tax i.e. there was no tax on the export of ATF.

For the third consecutive time the government reduced the windfall tax

This is the third consecutive time that windfall tax on petroleum products has been reduced. Earlier also on 1st December and 16th November the government had reduced the windfall tax. The Government of India decides the rates of windfall tax on oil exports. For this, a review meeting is held every 15 days. For this, the rates of windfall tax on crude oil change depending on the trend of crude oil prices in the last two weeks. Actually, through this, tax is imposed on the profits of oil marketing companies so that they are encouraged to meet the domestic demand more than the export of petroleum products. Windfall tax on petrol, diesel and ATF started from July 2022. 

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