The Union government on Thursday cut the windfall tax imposed on domestically-produced crude oil and on the export of diesel as international oil prices dropped, reported PTI.
A windfall tax was first imposed in India in July last year. It is a one-time fee imposed on a company whose profits have surged extraordinarily due to favourable market conditions.
A tax is levied on domestic crude oil if rates of the global benchmark rise above $75 (approximately Rs 6,242) per barrel. The export of diesel, aviation turbine fuel and petrol attract the windfall tax if their prices climb over $20 (about Rs 1,664) per barrel. The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
Reliance Industries and Nayara Energy are the primary exporters of fuel in India.
According to a government notification, the tax on domestic crude oil on Thursday was reduced to Rs 6,300 per tonne from Rs 9,800 per tonne. The tax on the export of diesel has been halved to Re 1 per litre. The levy on the export of aviation turbine fuel and petrol will continue to be zero.
The decision to reduce the tax came two weeks after the government had revised the levy on crude oil to Rs 9,800 per tonne from Rs 9,050 per tonne. The tax on the export of diesel was cut down from Rs 4 per litre to Rs 2 per litre and that on jet fuel was brought to zero from Re 1 per litre.
However, since the last revision that came into effect on November 1, international oil prices have dropped, according to PTI. Crude oil imported by India has fallen to an average of $84.78 (about Rs 7,056) per barrel this month from an average of $90.08 (around Rs 7,497) a barrel in October.