The windfall profit tax on locally produced crude oil and the tariff on diesel exports were both lowered by the Centre on Friday. The new tax rates are in effect starting on December 16, 2022.
According to a government statement, the tax on crude oil produced by local companies has been lowered from its previous rate of Rs4,900 per tonne to Rs1,700 per tonne.
The government has also reduced the cost of exporting diesel from Rs8 per litre to Rs5 per litre.
The calculation of the windfall profit tax involves deducting any price that producers receive that is more than the threshold.
India implemented the windfall profit tax on July 1 and joined an increasing list of countries that tax energy companies' higher-than-average profits. While taxes were imposed on the export of gasoline, diesel, and jet fuel (ATF), local crude oil production was subject to a Special Additional Excise Duty (SAED).
According to the government, the levy was instituted in response to the windfall profits realised by domestic crude producers and refiners as a result of high global crude and product prices.
The administration had stated that it will evaluate the windfall tax on domestic crude oil every two weeks.
The main exporters of fuels including diesel and ATF are Rosneft-based Nayara Energy and private refiners Reliance Industries Ltd. Producers like the government-run Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd. are targeted by the windfall charge on domestic crude.For feedback and suggestions, write to us at email@example.com
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