Windfall Tax Revised: Tax increased on petroleum crude by Rs 6,400 per tonne, what will be the effect

The government increased the Special Extra Excise Duty (SAED) on crude petroleum from zero to Rs 6,400 per tonne. There is no change in SAED on Petroleum and Aviation Turbine Fuel and it will remain nil.

The government has revised the windfall tax on domestic crude oil production to Rs 6,400 per tonne as it aims to rationalize the tax structure in the petroleum sector as well as boost investment in the industry. Windfall tax is a kind of surcharge that is levied on those businesses and sectors which earn more profits than the average due to economic expansion.

Rs 6,400 per cent increased duty on crude petroleum

The government increased the Special Extra Excise Duty (SAED) on crude petroleum from zero to Rs 6,400 per tonne. There is no change in SAED on Petroleum and Aviation Turbine Fuel and it will remain nil. This duty will be effective from 19 April. Tax rates are reviewed every fortnight. Export duty on diesel will be removed, after which SAED on diesel will be reduced from Rs 0.50 per liter to nil. In the last amendment, the tax on export of diesel was reduced from Re 1 to Rs 0.50.

Companies will be affected

The amendment in windfall tax on crude oil production is expected to generate additional revenue for the government, but it will affect the oil companies who will have to pay more tax. The removal of export duty on diesel will positively impact the manufacturing sector as it heavily depends on diesel for power generation as well as for transportation. Let us tell you that the introduction of windfall tax was started last year.

General public will be affected

There is no effect on the common people on the windfall tax. If this effect falls on those companies, the country is refining oil and exporting it to other countries. There are many companies in the country that import crude oil from outside and refine it in their country and export it to other countries at high prices. If this profit is seen more than the average, then the government uses this tax to increase its earnings, as it has done this time.