 "Centre cuts windfall tax on crude oil to Rs 6,300/tonne, halves for diesel")
The Centre on Thursday cut the windfall tax on diesel and crude oil. According to a government notification, the windfall tax on crude oil has been slashed to Rs 6,300 ($75.70) per tonne from Rs 9,800 a tonne earlier. For diesel, the windfall tax has been halved to Rs 1 per litre from Rs 2 per litre.
The levy on the export of jet fuel and petrol will continue to be zero. The new tax rates came into effect from Thursday.
Last month, the Centre had increased the windfall tax on crude oil to Rs 9,800 ($117.70) per tonne from Rs 9,050 per tonne. The windfall tax on aviation turbine fuel, which had been Rs 1 rupee per litre, was also removed at the time.
Moreover, the Centre has also reduced the windfall tax on diesel to Rs 2 per litre from Rs 4 per litre.
Before that, on October 18, the Centre cut the windfall tax on crude oil to Rs 9,050 per tonne from Rs 12,100 per tonne.
International oil prices have softened since the last revision, necessitating the reduction. The basket of crude oil that India imports has averaged $84.78 per barrel this month as against $90.08 a barrel average in the month of October and $93.54 in September.
More From This Section
India had imposed a windfall tax on crude oil producers in July last year and extended the levy on exports of gasoline, diesel and aviation fuel after private refiners wanted to make gains from robust refining margins in overseas markets instead of selling it locally.
At that time, export duties of Rs 6 per litre each were levied on petrol and ATF and Rs 13 a litre on diesel. A Rs 23,250 per tonne windfall profit tax on crude oil produced by companies such as OIL and Natural Gas Corporation (ONGC) was also levied.
A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above $75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) rise above $20 per barrel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
(With agency inputs)