As prices of crude went down, the Finance Ministry late on Saturday announced a further cut in windfall gain tax on domestically produced crude and on diesel. At the same time, this levy has been withdrawn on the export of Aviation Turbine Fuel (ATF).

Two notifications issued by the Central Board of Indirect Taxes & Custom (CBIC) said, from Sunday, domestically produce crude will attract windfall gain tax at the rate of ₹8,000 per tonne as against ₹10,500 per tonne. On export of diesel, the rate has been lowered to ₹5 a litre from ₹10, while on ATF, it is nil as against ₹5 a litre.

While private refiners Reliance Industries Limited and Rosneft-based Nayara Energy are the principal exporters of fuels like diesel and ATF, the windfall levy on domestic crude targets producers like state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Limited.

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Windfall tax cut on diesel, ATF exports , locally produced crude

Earlier move

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. But international oil prices have cooled since then, eroding the profit margins of both oil producers and refiners.

Export duties of ₹6 per litre ($12 per barrel) were levied on petrol and ATF and ₹13 a litre ($26 a barrel) on diesel. At ₹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 five rounds on July 20, August 2, August 19, September 1, and September 16 and were removed for petrol.

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