For the third consecutive fortnight, the government has reduced the windfall profit tax on crude oil exports to zero. Yes, this news is very good for those companies that refine crude oil in India and export it abroad. Now they will not have to pay much tax on the export of crude oil and their profits will also be higher. According to the information, this decision has been taken by the government due to the fall in the price of crude oil. Earlier this month too, the government had given a big relief to such companies by cutting the windfall profit tax. Let us also tell you what else the government has said about the windfall profit tax.
Windfall tax reduced to zero
The Indian government on Tuesday announced the removal of the windfall tax on crude oil of Rs 1,850 per tonne. The government notification says that this will be effective from September 18. India has started imposing windfall tax from July 19, 2022. This move has come amid the significant fall in crude oil prices. This is the second time since the introduction of this tax that this tax has been reduced to zero.
Last time on April 4, 2023, the central government had reduced it to zero. Earlier, the government had reduced the windfall tax from Rs 2,100 per metric tonne to Rs 1,850 per metric tonne. Which was implemented from July 31. Earlier on August 17, the government had reduced the windfall tax on petroleum products from Rs 2,400 per tonne to Rs 2,100 per tonne. The government reviews this tax every 15 days and reduces or increases it.
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When did the windfall tax start?
The Indian government had imposed a windfall profit tax on crude oil producers from July 2022. After which the companies were forced to pay taxes on the export of petrol, diesel and ATF. The government had to take this decision because instead of supplying crude oil locally, private refineries were supplying fuel abroad to earn more money. After which the profits of the companies started increasing unexpectedly. The government reduces the windfall profit tax when there is a reduction in the crude oil prices in the international market. Following the increase in crude oil prices, the government also increases the windfall profit tax.
Crude oil prices fall
At the same time, a sharp drop in crude oil prices has been observed on the international market. According to data, the price of Brent crude oil is currently quoted at $74 per barrel. This represents a one and a half percent increase. In September, however, a 6 percent decrease in oil prices was observed in the Gulf countries. On September 10, the price of crude oil had reached $68 per barrel.
On the other hand, the prices of US WTI crude oil are currently experiencing an increase of more than 2 percent and the price has dropped to $71.56 per barrel. While in the month of September the price of US crude oil fell by 2.70 percent. On September 10, US oil prices had reached $64.61 per barrel.
