Edited By: Mohammad Haris
Last Updated: March 04, 2023, 09:22 IST
A windfall tax is a one-off tax imposed by a government on a company. It is levied on an unforeseen or unexpectedly large profit, especially unfairly obtained. (Photo: Reuters)
Exports of petrol continues to have zero special additional excise duty
The government has marginally hiked the windfall tax levied on locally produced crude oil from Rs 4,350 a tonne to Rs 4,400 a tonne. Besides, the Centre has also reduced the special additional excise duty (SEAD) on diesel to Rs 0.5 per litre from Rs 2.5 per litre, and on aviation turbine fuel (ATF) to nil. The latest review of SAED will be effective from March 4.
Exports of petrol continues to have zero special additional excise duty.
The duty is revised every fortnight, based on the international crude oil prices.
The government on July 1, 2022, imposed the windfall tax of Rs 23,250 per tonne on domestic crude production. Export duties of Rs 6 per litre on petrol and ATF, and Rs 13 a litre on diesel were also levied.
A windfall tax is a one-off tax imposed by a government on a company. It is levied on an unforeseen or unexpectedly large profit, especially unfairly obtained. When the crude oil prices rise sharply, it gain an advantage to domestic producers as their selling prices jump in line with the international prices.
While windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference of international oil price realised and the cost.
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