Windfall Tax: The government on Friday announced a substantial hike in the windfall tax on crude oil and air turbine fuel (ATF) oil, according to an official notification.

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Windfall gain tax on crude oil has been increased from Rs 1900/tonne to Rs 5050/tonne. On ATF, it has almost doubled from Rs 3.5/Litre to Rs 6/Litre, the government notification read.

With the hike in windfall tax, the additional export duty on diesel has also been raised, however, no change in petrol prices. The additional export duty on diesel is now hiked from Rs 5/litre to Rs 7.50 per liter, as per the notification.

Also Watch: Reliance Industries Q3 FY23 Results Preview: What Is The Benefit Of Reduction In Windfall Tax?

The new rates will be applicable from February 4, 2023.

The government is aiming to collect Rs 25,000 crore from windfall tax in FY23, Revenue Secretary Sanjay Malhotra said on Friday.

The government had imposed a windfall tax in July 2022 on exports of domestically produced crude oil and fuel. It is also called windfall profit tax. India is the largest consumer and importer of oil in the world, and it has been buying crude from Russia since last year at comparatively lower prices.

Also Read: Windfall tax cut on crude, export taxes on aviation fuel, diesel

Indian companies have started increasing their exports for profit after Russia's supply was affected internationally last year. This benefited the Indian oil exploration and production companies, on which the government decided to impose a windfall tax.

The windfall tax rate is reviewed and revised every fortnightly, on an average.

What is Windfall Tax?

Windfall means sudden profit or money and the tax that is levied on such profit is called Windfall tax. The government imposes such tax on certain industries, only when companies are making a sudden profits due to some external reasons.