Center cuts unexpected tax on domestic crude exports, check new rates here

 

When the levy was first introduced, a windfall tax was levied on exports of petrol along with diesel and ATF.

The central government has reduced the surcharge on export of domestic crude oil to ₹1,700 per tonne from the existing ₹4,900 per tonne. The tax on Aviation Turbine Fuel (ATF) has also been reduced from ₹5 per liter to ₹1.5 per litre, according to a notification issued by the Finance Ministry on Thursday.

It also states that the windfall tax reduction on diesel and ATF will come into effect from today, December 16, as per the notification cited by ANI.

Govt slashes windfall tax on diesel, ATF. According to a government notification, the tax on export of domestic crude oil has been reduced to ₹1,700 per tonne from the existing ₹4,900 per tonne. Tax on ATF has been reduced from ₹5 per liter to ₹1.5 per litre.

— ANI (@ANI) December 16, 2022

Earlier on December 1, the Center reduced the windfall tax on domestic crude oil sales to ₹4,900 per tonne from the existing tax of ₹10,200 crore.

When the levy was first introduced, a windfall tax was levied on exports of petrol along with diesel and ATF. Earlier, the special additional excise duty on aviation turbine fuel was kept unchanged at ₹5 per litre. But in the subsequent fortnightly review, the tax on petrol was removed.

The windfall tax on crude is calculated by taking away any price producers are getting above a threshold, and the levy on fuel exports is based on the crack, or margin, that refiners earn on overseas shipments. These margins are mainly the difference between international oil price and cost.

Crude oil prices declined substantially amid the ongoing strict COVID-19 restrictions in China and concerns over impact on demand in the world's second largest crude oil importer.

The windfall tax was first imposed on July 1 as energy companies raked in huge profits amid multi-year highs in crude oil prices due to the Russia-Ukraine conflict. At that time, an export duty of ₹6 per liter was imposed on petrol and aviation turbine fuel and ₹13 per liter on diesel. The windfall tax on the sale of locally produced crude oil was ₹23,250 per tonne when it was first imposed.