WINDFALL TAX Flashcards
WHY IN NEWS?
The Indian government today reduced windfall profit tax on locally produced crude oil, and on export of diesel and aviation turbine fuel, amid a decline in global crude oil prices.
New Delhi has cut cess on crude to Rs 10,500 per tonne, according to a notification from the Ministry of Finance. India has also lowered windfall tax on diesel to Rs 10 per litre and on ATF to Rs 5 per litre.
WHAT IS WINDFALL TAX?
Windfall tax is levied by governments when an industry unexpectedly earns large profits, primarily due to an unprecedented event. With crude oil prices falling in international markets, the government recently cut the windfall tax on locally produced crude oil and diesel.
On September 1, the government had increased the windfall tax on domestic crude oil to Rs 13,300 per tonne from earlier Rs 13,000 per tonne. It had also revised the cess on export of ATF to Rs 9 per litre from Rs 2 per litre and increased excise duty on export of diesel to Rs 12 per litre from Rs 6 per litre.
Total windfall tax on diesel includes Rs 1.5 per litre road infra cess.
Overseas shipment of petrol will continue to be exempted from windfall tax.
This is the fifth revision of windfall tax since it’s implementation on July 1.
