Windfall tax on domestic crude reduced to Rs 13,000 per ton
The recently introduced windfall tax is currently going through its third amendment. However, there is still no gasoline export tax. The change comes as crude oil prices fell to a six-month low below $90 a barrel in the global market.
India introduced a windfall tax on July 1, joining a growing number of countries that tax above-average profits from energy companies. However, since then oil prices have fallen internationally, squeezing profit margins for oil producers and refiners. After that, on July 20, during the first fortnightly review, the export duty of Rs.6 per liter on petrol was eliminated, and export taxes of Rs.11 and Rs.4 on diesel and jet fuel , respectively, were each reduced by 2 rupees. The tariff on locally produced crude oil has also been reduced to Rs 17,000 per ton.
The new tax was introduced following reports that domestic companies were reaping huge profits due to the sharp increase in oil prices that occurred due to geopolitical unrest. The government said it would review exports and imports of these products every two weeks to review its choice when applying the new levies.
Taxes were cut earlier this month as India’s trade deficit hit a record high in July as high commodity prices and a depreciating rupee boosted the country’s import costs. The gap between exports and imports narrowed to $31.02 billion in July from $26.18 billion in June. The import bill is rising due to falling exports, rising commodity prices and weak Rupee. Comparing July to the same month last year, imports increased by 43.59% and exports decreased by 0.76%.