New Delhi [India], December 2 : The government on Monday withdrew the windfall tax levied on Aviation Turbine Fuel (ATF), crude products, petrol and diesel through a notification introduced in the Lok Sabha.
The withdrawal of the windfall tax is a big relief to the oil companies like Reliance and ONGC.
The tax was imposed in July 2022 to seek a share of higher revenue earned by these oil giants because of rising global crude prices through higher refining margins.
The removal of the tax will make these companies make higher profits on refining margins.
The Ministry of Finance notification says that the special additional excise duty (SAED), commonly known as windfall tax on the production of petroleum crude and on the export of Aviation Turbine Fuel (ATF), motor spirit, commonly known as petrol and high spirit diesel oil will no longer be levied.
The windfall tax used to be revised every 15 days based on international crude oil prices after it was imposed in July 2022. The tax rates were reviewed every fortnight, based on the average oil price in the last two weeks.
The tax formula used to be managed by the Department of Revenue and adjusted as per the fluctuations in global oil prices.
But now with average crude oil prices coming down government was not earning much in revenue from any of the sectors ATF, Crude oil, petrol or diesel so it decided to withdraw the windfall tax.
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