Centre hikes windfall tax on domestic crude by Rs 750 per tonne | Know more | Commodities News

By Cross Talk India Team Last updated Oct 31, 2023

Centre hikes windfall tax on domestic crude by Rs 750 per tonne | Know more

The Centre on Tuesday hiked windfall tax by Rs 750 per tonne. (Photo credit: Pixabay)

New Delhi: The Centre on Tuesday notified a hike in tax on windfall gains by Rs 750 per tonne to Rs 9,800 per tonne from Rs 7,050 per tonne. The Centre relaxed the levy on diesel to Rs 2 per litre from Rs 4 per litre earlier. Jet fuel levy was slashed to zero from Rs 1 per litre. The company maintained the export tax on petrol at zero. The new prices and rates will come into effect from November 1, 2023. Earlier this month, the Centre had slashed windfall tax on petroleum crude to Rs 9,050 per tonne from Rs 12,100 per tonne earlier.

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What is windfall tax?

Windfall tax is a levy introduced by the Indian government and tweaked every 15 days by them to ensure adequate availability of petrol, diesel and jet fuel and keep prices in check amid fluctuations in interntional markets owing to geopolitical changes. Windfall tax was first rolled out in July last year. The tax is charged on better than average revenues earned by companies.

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How much revenue was generated from windfall taxes?

Windfall tax is collected from GAIL, Oil India, and ONGC, among other entities. The estimated revenue from windfall taxes is Rs 65,600 crore. The Centre is expected to earn another Rs 52,700 crore from tax on export products if the levies continue for one year. On Tuesday, Brent crude was priced at $88.19 per barrel, up 0.85 per cent on the day. West Texas Intermediated crude was priced at $83.14 per barrel, up 1.01 per cent on the day.

India’s reliance on Russian crude oil declined in October owing to price rise, Reuters reported, citing data from Kpler and Votexa. India’s import of Russian crude declined between 1.49-1.57 million barrels per day in October.