Windfall tax on crude oil raised
The government has hiked the windfall tax on domestically produced crude oil, while reducing the tax rate on diesel export.
The tax on crude produced by firms such as state-owned ONGC was hiked to Rs 10,200 per tonne from Rs 9,500 per tonne, with effect from November 17, a government notification said.
In the fortnightly revision of the windfall tax, the government cut the rate on the export of diesel to Rs 10.5 per litre from Rs 13 per litre. The levy on diesel includes Rs 1.50 per litre road infrastructure cess.
The export tax on jet fuel or ATF, which was set at Rs 5 a litre in the last review, has not been altered.
When the levy was first introduced, a windfall tax on export of petrol alongside diesel and ATF too was levied. But the tax on petrol was scrapped in subsequent fortnightly reviews.
While the windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference between the international oil price realised and the cost.
The windfall tax dragged the net profit of ONGC down by 30 per cent in the September quarter to Rs 12,825.99 crore compared with Rs 18,347.73 crore in the same period a year ago, the state-owned firm had said.