New Delhi: The Union government slashed the windfall profit tax on domestically-produced crude oil and on the export of diesel and aviation turbine fuel (ATF) on Thursday, effective from Friday. The order was issued following a decline in global oil prices.
Thursday’s official order said that the tax on crude oil produced by companies like Oil and Natural Gas Corporation (ONGC) has been cut to Rs 1,700 per tonne from Rs 4,900. The new tax rates became effective on Friday, December 16.
Crude oil extracted from the ground is refined and converted into fuels like petrol, diesel and ATF.
The Union government has reduced the tax on the export of diesel by Rs 3. It is now reduced to Rs 5 from Rs 8. Similarly, the tax on overseas shipments of ATF has been reduced to Rs 1.5 a litre from Rs 5.
The reduction in tax rate comes in the wake of a 14 per cent drop in global crude oil prices since November.
India first imposed windfall profit taxes on July 1. At that time, export duties of Rs 6 per litre ($12 per barrel) each were levied on petrol and ATF and Rs 13 per litre ($26 per barrel) on diesel. At the same time, the government levied a windfall profit tax of Rs 23,250 per tonne ($40 per barrel) on domestic crude production.
The export tax on petrol has since been scrapped. The tax rates are reviewed every two weeks based on the average oil prices in the previous two weeks.
