May 16th 2024.
In an effort to support the domestic production of crude oil, the government of India has announced a reduction in the windfall tax on domestically produced crude oil. The tax, which was previously set at Rs 8,400 per tonne, has now been reduced to Rs 5,700 per tonne, effective from Thursday. This tax is levied in the form of Special Additional Excise Duty, which is aimed at regulating the profits of energy companies.
However, it's worth noting that the export of diesel, petrol, and jet fuel, also known as ATF, will not be subjected to this tax. The Special Additional Excise Duty for these products will remain at a rate of 'nil.' This move is expected to provide a boost to the energy sector and promote the export of these essential fuels.
The new tax rates will come into effect from May 16, as stated in an official notification. This decision comes after India first implemented the windfall profit taxes on July 1, 2022, following the footsteps of other countries that also tax supernormal profits of energy companies. It's important to note that these tax rates are subject to review every fortnight, based on the average oil prices in the previous two weeks.
This reduction in windfall tax is a welcome move for the domestic energy sector, as it will provide relief to energy companies and encourage them to invest in domestic production. The government's decision to regularly review the tax rates also showcases their commitment to ensuring a fair and balanced tax system for the energy industry. With this new development, the future of India's energy production looks promising.
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