The government has increased the windfall tax or Special Additional Excise Duty (SAED) on the production of crude petroleum from Rs 8,000 per tonne to Rs 11,000 per tonne with effect from Sunday, October 16.
Sources had earlier told CNBC-TV18 that the government was going to review windfall gains tax levies and that fortnightly movement proposes a marginal increase in levies on domestically-produced crude and export of diesel.
The windfall tax or SAED is a one-off tax imposed by a government on a company or industry when it benefits from something that it is not responsible for, the financial gain that ensues is called windfall profits.
The
government has also risen the SAED on the export of aviation turbine fuel (ATF) to Rs 3.50 per litre from nil in the last review. The windfall tax on the export of diesel has been increased from Rs 5 per litre to Rs 10.50 per litre, taking the total excise duty on the export of diesel to Rs 12 per litre ( including Rs1.50 per litre RIC i.e road infrastructure cess).
Earlier this month, the government had cut the windfall profit tax on locally-produced crude oil and diesel, in line with a fall in international rates, and scrapped the levy on the export of jet fuel with effect from October 2. At the sixth fortnightly review, the government reduced the tax on domestically-produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne.
The levy on the export of diesel was reduced to Rs 5 per litre from Rs 10 per litre. The tax at the rate of Rs 5 a litre on jet fuel exports was scrapped with effect from October 2.
However, Saturday's move to raise taxes follows the Organization of the Petroleum Exporting Countries and allies’ (OPEC+) recent decision to
cut production that pulled up international prices, showing an average price of over $90 per barrel.
Meanwhile, Union Finance Minister Nirmala Sitharaman on Friday had warned that the tense and uncertain geopolitical environment could trigger fresh supply concerns in the winter for critical commodities such as crude and natural gas.
Her remark came as the Russia-Ukraine war has had a far-reaching impact on the global energy system, disrupting supply and demand patterns and fracturing long-standing trading relationships. It has pushed up energy prices for many consumers and businesses around the world, hurting households, industries and entire economies of several nations.
(Edited by : Kanishka Sarkar)
