Windfall Tax on Fuel Export withdrawn within Three Weeks of Imposition

· Reliance and Russia Controlled Nayara Gain

· The move to Garner 1 lakh crs from 35% discount on Russian Crude Fails

· No News of Progress on making Exported Quantity to Compensate Domestic Market

· Diesel and ATF must Pay Reduced Export Tax

· Back to Govt Controlled APM Returns?

[ABS News Service/21.07.2022]

India reduced the windfall tax on diesel and ATF shipments by 2 rupees (3 cents) a liter, and scrapped completely a 6-rupees-per-liter levy on gasoline exports

‘Windfall’ levy on domestic crude and fuel exports on Wednesday in the first review of the tax imposed on July 1 this month as international crude oil prices drifted down.

The Cess on domestically produced crude was cut 27% to ₹17,000 per tonne from ₹23,250 per tonne. The ₹6 per litre tax on petrol exports was scrapped while that on diesel and aviation fuel was reduced by ₹2 a litre each to ₹11 and ₹4, respectively. The government also scrapped the special additional excise duty levied on exports from special economic zones.

The new rates will be applicable from Wednesday, according to a notification issued by the government. The government had said it would review the windfall levy every 15 days when it imposed the tax on July 1 to take a share of the large profits made by oil companies because of high global prices.

“The review is not conclusive and there may be further tweaks, depending on how the oil prices are behaving,” a senior official told EcoTimes, adding that the review process will continue for another quarter at least.

Finance minister Nirmala Sitharaman had said that the levy was imposed after considering windfall gains by the domestic crude producers due to rising global crude prices in recent months.

The levy was initially expected to fetch the government about ₹1 lakh crore in the rest of the FY23, but the cut is expected to reduce those gains to the exchequer.