Govt cuts windfall profit tax on domestic crude oil to Rs 13,000 per tonne

The federal government on late Thursday elevated windfall revenue tax on diesel export to Rs 7 per litre from Rs 5 per litre earlier. Moreover, the federal government once more imposed Rs 2 per litre tax on export of aviation turbine gas after scrapping it earlier this month.

The brand new adjustments will come into impact from August 19.

The Central Board of Excise and Customs (CBIC), in its notification, has nevertheless lowered the windfall tax on domestically produced crude oil to Rs 13,000 a tonne from Rs 17,750 a tonne earlier, a transfer that may come as a reduction for producers like ONGC and Vedanta Ltd.

That is the third spherical of the revision of the newly-introduced windfall tax. Nevertheless, the levy on export of petrol stays nil. The revision comes at a time when worldwide oil costs have slid to beneath $90 per barrel, a six-month low.

India first imposed windfall revenue tax on July 1, becoming a member of a rising variety of nations that taxed tremendous regular income of vitality firms. However worldwide oil costs have cooled since then, eroding revenue margins at each oil producers and refiners.

Thereafter, within the first fortnightly overview on July 20, the Rs 6 a litre export obligation on petrol was scrapped, the tax on the export of diesel and jet gas was lower by Rs 2 per litre every to Rs 11 and Rs 4, respectively. The tax on domestically produced crude oil was additionally lower to Rs 17,000 per tonne.

On August 3, authorities had elevated the windfall tax on domestically produced crude to Rs 17,750 a tonne from Rs 17,000 a tonne earlier. Nevertheless, the export tax on diesel and aviation turbine gas was lowered, according to softening worldwide petroleum product costs.

Through the second revision, it had additionally lower the levy on diesel to Rs 5 per litre from Rs 11 per litre earlier. As well as, it additionally scrapped Rs 4 per litre tax on export of aviation turbine gas.

The brand new tax was imposed after the home firms had been seen to be making big income since world oil costs have shot up amid geopolitical turmoil.

Whereas introducing the brand new levies, the federal government had mentioned that it’ll overview exports and imports of this stuff each fortnight to amend its determination.

The discount in taxes earlier this month got here as India’s commerce hole swelled to a report excessive in July as elevated commodity costs and a weak rupee inflated the nation’s import invoice.

The hole between exports and imports widened to $31.02 billion in July from $26.18 billion in June. This, on account of exports falling and elevated commodity costs along with a weak rupee, are inflating the import invoice. Imports jumped 43.59% in July from the year-ago month, whereas exports dropped 0.76%.

Pricey Reader,

Enterprise Commonplace has all the time strived arduous to supply up-to-date data and commentary on developments which might be of curiosity to you and have wider political and financial implications for the nation and the world. Your encouragement and fixed suggestions on the right way to enhance our providing have solely made our resolve and dedication to those beliefs stronger. Even throughout these tough instances arising out of Covid-19, we proceed to stay dedicated to protecting you knowledgeable and up to date with credible information, authoritative views and incisive commentary on topical problems with relevance.

We, nevertheless, have a request.

As we battle the financial affect of the pandemic, we’d like your assist much more, in order that we are able to proceed to give you extra high quality content material. Our subscription mannequin has seen an encouraging response from lots of you, who’ve subscribed to our on-line content material. Extra subscription to our on-line content material can solely assist us obtain the targets of providing you even higher and extra related content material. We consider in free, truthful and credible journalism. Your assist by extra subscriptions might help us practise the journalism to which we’re dedicated.

Assist high quality journalism and subscribe to Enterprise Commonplace.

Digital Editor