The government on Wednesday rolled back a windfall tax on the export of petrol and cut the levy on overseas shipments of diesel and Aviation Turbine Fuel (ATF) and on domestically produced crude oil against the backdrop of a decline in global oil prices.
While the Rs 6 a litre export duty on petrol was scrapped, the tax on the export of diesel and jet fuel was cut by Rs 2 per litre each to Rs 11 and Rs 4 respectively, government notifications showed.
The tax on domestically produced crude was also reduced to Rs 17,000 per tonne from Rs 23,250, a move that will benefit state owned Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd. Also, correcting the anomaly that crept in when the windfall taxes were slapped on July 1, the government exempted fuel exports from refineries located in export-focused zones from the levies.
The move will do good to Reliance Industries whose exports had become uncompetitive on account the export levies that were as high as USD 26 per barrel.
The Centre imposed windfall taxes on July 1, joining a growing number of nations that taxes super normal profits of energy companies.
A windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry.
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