The central government on Monday slashed the windfall profit tax on domestically produced crude oil. As per an official notification, the windfall tax on crude oil has been cut to zero from the previous Rs 4,100 per tonne.
As far as the windfall tax on petrol, diesel and aviation turbine fuel (ATF) go, it was left unchanged to zero. The announcement comes in the backdrop of government assessing and revising windfall profit tax every fortnight.
Before this revision, in early May, the central government cut the windfall tax on domestically produced crude oil to Rs 4,100 per tonne from the previous Rs 6,400 per tonne.
However, it must be noted that the latter figure of windfall tax was reimposed from ‘zero’ in an earlier notification. During this time, the export duty on diesel was also scrapped.
As mentioned before, the windfall profit tax is assessed and revised every fortnight. Basis average oil prices in the previous two weeks of revision, the new rate gets adjusted and announced via an official notification accordingly.
The imposition of windfall profit tax was reportedly done to compensate for the reduction in excise duty on petrol and diesel, primarily to provide any relief to consumers. As far as the target audience goes, the windfall tax mainly targets producers like state-run Oil and Natural Gas Corporation (ONGC) etc.
