Windfall Tax: On Monday, the central government once again gave a blow to the oil companies and announced to increase the Windfall Tax on petroleum crude. While issuing a notification on this matter, the government has informed that from Tuesday,. the windfall tax on petroleum crude has increased from Rs 4,250 per tonne to Rs 7,100 per tonne. Earlier, on August 1, the government had increased the windfall tax from Rs 1600 per tonne to Rs 4250 per tonne.
Along with crude petroleum, the government has also decided to increase the Special Additional Excise Duty (SAED) on the export of diesel. It has increased from Rs 1 a liter to Rs 5.50 a litre. Apart from this, duty has also been imposed on jet fuel i.e. Aviation Turbine Fuel (ATF) at the rate of Rs 2 per litre. On the other hand, the government has not imposed any SAED fee on petrol.
Last year the government imposed windfall tax
Significantly, in the year 2022, the Government of India started imposing windfall tax on crude oil. This tax was first imposed on 1 July 2022. This tax will be imposed on the profits of oil companies. Windfall tax is collected by the government so that tax can be recovered from the oil companies which earn more than average profit..
It is worth noting that the government decides to impose windfall tax after seeing the profit. Windfall tax is reviewed every 15 days keeping in view the profit margin of the oil companies.
What will be the effect?
The government imposes windfall tax only when there is a huge increase in the profit of the oil companies. Due to this, some part of their profit is deposited with the government. After the start of the Russia-Ukraine war, a tremendous increase in the price of crude oil was seen.
After this, the government had decided to collect tax from the profit of the oil companies. Along with this, many private oil companies prefer to sell oil abroad instead of India in order to make more profits. In such a situation, the government imposes tax on this profit so that companies can sell oil in the country instead of abroad.
