Windfall tax on crude oil, ATF and diesel slashed

The government has slashed the windfall profit tax levied on domestically produced crude oil, aviation turbine fuel and the export of diesel. The decision to cut the windfall tax is in line with international oil prices. The new price regime comes into effect today. The levy on domestically produced oil has been cut to Rs 4,350 per tonne from Rs 5,050 while the special additional excise duty on ATF has been cut to Rs 1 from Rs 6 per litre.

The special additional excise duty on diesel has been slashed to Rs 3 from Rs 7.5 per litre. Windfall tax, which is also known as special additional excise duty, was brought in by the government on July 1 last year to tax the industry on extraordinary profits, which it earned through sale of refined crude in global markets. The government reviews this tax every fortnight. Several major oil companies were hit by this tax and some of them had urged the government to withdraw it and rather adopt the dividend method to seek accruals. 

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