The Central Board of Indirect Taxes and Customs (CBIC) vide notification No. 34/2023 G.S.R. 747(E) issued on 17th October has notified the reduction in the windfall tax for crude, diesel and ATF.
The government has recently introduced a reduction in windfall taxes applicable to various petroleum products. Effective as of October 18, 2023, the windfall tax on crude oil has been lowered from the previous rate of Rs 12,100 per tonne to the new rate of Rs 9,050 per tonne. Similarly, the tax on diesel has also seen a decrease, going from Rs 5 per litre to Rs 4 per litre, while the tax on Aviation Turbine Fuel (ATF) has been reduced from Rs 2.5 per litre to Rs 1 per litre. It is noteworthy that the export tax on petrol has remained unchanged, staying at a rate of zero.
This tax revision represents a significant shift in the government’s fiscal policy concerning the energy sector. Notably, India had initially introduced windfall profit taxes on July 1 of the preceding year, following the global trend of several nations aiming to tax the supernormal profits of energy companies. This reduction is expected to have far-reaching implications for the energy industry, providing relief and potentially spurring further economic activity in this sector.
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