With effect from Tuesday, the government announced a reduction in the Windfall Tax on domestically produced Crude Oil, from Rs 2,300 per tonne to Rs 1,700 per tonne.
Special Additional Excise Duty (SAED) is the tax imposed. An official announcement states that SAED on the export of gasoline, diesel, and aviation fuel, or ATF, has been kept at zero.

In keeping with the decline in oil prices throughout the world, the government has lowered the windfall profit tax on exports of diesel and Crude oil produced domestically.

Entities that make disproportionate profits in unforeseen market situations are subject to windfall tax. Governments can use it as a useful tool to make sure these companies give society a fair portion of their revenues.

The average oil price for the two weeks prior is used to recalculate the tax rates every two weeks.
In July 2022, in response to skyrocketing crude oil prices, India levied a windfall tax on producers of crude oil and prolonged the tax on gasoline, diesel, and aviation fuel exports. This was because private refiners preferred to sell petroleum abroad in order to profit from strong refining margins rather than selling domestically. Governments impose windfall taxes on industries that experience sudden, significant earnings.
Domestic crude oil is subject to a windfall tax if the price of the global benchmark surpasses $75 per barrel. The charge is applied to the export of gasoline, diesel, and ATF if the product cracks or margins over $20 per barrel.

Product cracks or margins are the differences between finished petroleum products and crude oil, or raw material.

Lower petroleum prices are the result of growing US crude inventories and concerns about demand brought on by a weakening global economy.

Read More

The post The Government Reduces the Windfall Tax on Crude Oil to Rs 1,700 per tonne appeared first on Insights Success.