PTI
New Delhi, December 16
The government has slashed the windfall profit tax levied on domestically-produced crude oil and on export of diesel and ATF following a decline in global oil prices, according to an official order.
New rates effective immediately
- The levy on crude oil produced by companies such as ONGC has been cut steeply to Rs 1,700 per tonne from Rs 4,900, the order dated December 15 said
- Crude oil pumped out of the ground and from below seabed is refined and converted into fuel like petrol, diesel and aviation turbine fuel
- The government has also cut the tax on export of diesel to Rs 5 per litre from Rs 8 and the same on overseas shipments of ATF to Rs 1.5 a litre from Rs 5
- The new tax rates are effective from December 16
The levy on crude oil produced by companies such as ONGC has been cut steeply to Rs 1,700 per tonne from Rs 4,900, the order dated December 15 said.
Crude oil pumped out of the ground and from below seabed is refined and converted into fuel like petrol, diesel and aviation turbine fuel (ATF).
The government has also cut the tax on export of diesel to Rs 5 per litre from Rs 8 and the same on overseas shipments of ATF to Rs 1.5 a litre from Rs 5. The new tax rates are effective from December 16.
The reduction in tax rates follows a 14% slump in global crude oil prices since November.
India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. At that time, export duties of Rs 6 per litre ($12 per barrel) each were levied on petrol and ATF and Rs 13 a litre ($26 a barrel) on diesel.
A Rs 23,250 per tonne ($40 per barrel) windfall profit tax on domestic crude production was also levied. Export tax on petrol has since been scrapped.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
“India’s fortnightly windfall tax revision on oil producers was on expected lines,” Morgan Stanley said commenting on the move.
Windfall tax on domestic oil production declined from about $8.3 per barrel to $2.8. “The adjustment, while still ad hoc, highlighted the cap on the producer oil price at around $75 per barrel and on profitability at $20-26 per barrel,” it said.
Export tax on diesel has been reduced from $15.7 per barrel to $9.6.
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