Government reduced windfall tax on export of domestic crude oil, diesel and ATF

The government reduced the Special Additional Excise Duty (SAED) on crude petroleum to Rs 9,050 per tonne from October 18 i.e. today.

At the last review on September 29, the windfall tax on crude oil produced in India was set at Rs 12,100 per tonne.

SAED or duty on the export of diesel has been reduced to Rs 4 per liter from the current Rs 5 per liter.

Also, the duty on ATF (Aviation Turbine Fuel), also known as aircraft fuel, will be reduced from the current Rs 2.5 per liter to Rs 1 per liter. Whereas SAED on petrol will continue at zero. For the first time, the government imposed a windfall tax on 1 July 2022.

Windfall tax is a tax that the oil companies present in the country pay to the government. Windfall tax is imposed on oil companies when they make significant immediate profits under certain circumstances.

For example, the government first imposed the windfall tax in July 2022 when there was a war between Russia and Ukraine. Due to this war, there was a sharp rise in the prices of crude oil in the international markets, due to which all the oil companies of the country earned huge profits, after which the government imposed a tax to control the prices.

Reducing the windfall tax benefits oil companies. The government reviews the windfall tax every 15 days.

Increasing or decreasing the windfall tax will not have any impact on petrol and diesel in the country because the windfall tax is levied on exported petrol and diesel.

At present, the price of crude oil in the international markets is $ 90.08 per barrel. In India's capital New Delhi, the price of petrol is Rs 96.72 and the price of diesel is Rs 89.62 per liter.