Windfall Tax On Diesel, Made Nil For Jet Fuel; Levy On Domestic Crude Increased

As per the government notification released Tuesday, the centre has reduced fuel export taxes again in less than a fortnight and at the same time increased windfall tax on domestically manufactured crude oil.

The notification by the finance ministry said that India cut taxes levied on jet fuel export to zero from Rs 4 per litre, likewise for diesel the rate has been cut to Rs. 5 per litre from Rs. 11 per litre. The changes will come into effect from Wednesday.

Further, India that is globally the third leading importer of oil also increased the tax on locally produced crude from Rs. 17,000 per tonne to Rs. 17,750 ($226.14) per tonne, the notification said.

On July 1, the country levied windfall tax on crude oil producers. A windfall tax is a one-off tax imposed on an unexpectedly huge profit, made especially through unfair means. Now as internationally crude oil rates have increased sharply domestic crude producers have been selling crude to refiners in the domestic market at par with international rates and hence making windfall gains.

Later on July 20, the centre said it would cut the windfall tax on oil manufacturers as well as levies on refiners. Further it completely exempted gasoline from export duty implications.

Previously a finance ministry official told Reuters in July that the centre shall withdraw the windfall tax levied on oil producer as well as refiners only in a condition when the global crude prices slip by $40 per barrel from current levels.