The government has abolished the windfall tax on aviation turbine fuel, crude products, petrol, and diesel after extensive deliberations. This decision is a relief for oil giants like Reliance and ONGC. The levy, introduced in July 2022 due to rising global crude prices, had aimed to capture revenue from producers' windfall gains. This move shall benefit the refining margins significantly.
The Government on Monday scrapped the windfall tax on Aviation Turbine Fuel (ATF), crude products, petrol and diesel products, after months of deliberations.
The move, effective immediately, is set to bring relief to oil conglomerates Reliance and ONGC , as their gross refining margins may get a lift.
The windfall tax is a special levy on domestic crude oil production, introduced in July 2022 after rising global crude prices , to capture revenue from windfall gains made by producers.
Reliance Industries ' shares were trading in the green at Rs 1,300.05 apiece on Monday at 1.04 PM. Furthermore, the government has also withdrawn Road and Infrastructure Cess (RIC) on export of petrol and diesel.
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In September, the government of India announced the scrapping of windfall tax on crude oil from Rs 1,850 per tonne in August.
The windfall tax on export of diesel and aviation turbine fuel was also eliminated.
During the onset of the Russia-Ukraine war and the West's sanctions on the Kremlin, a surge in crude oil prices resulted in unprecedented profits for oil companies.
These profits created an environment where oil companies made significant, one-time profits.
In response to these extraordinary profits, India had joined several other nations by imposing a windfall tax on domestic crude oil producers and exporters.
This move aimed to generate additional revenue for the government by imposing a windfall tax on domestic crude oil producers and exporters.
This move aimed to generate additional revenue for the government by taxing these super-normal profits.
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