“Government Cuts Supplementary Excise Tax on Indigenous Crude Oil to ₹1300”
In a move aimed at recalibrating fiscal measures related to the energy sector, the Indian government has announced a significant reduction in the windfall profit tax imposed on domestically produced crude oil and diesel exports. The adjustment, articulated in the form of a Special Additional Excise Duty (SAED), signifies a strategic shift in taxation policies to address fluctuations in the oil market.
In a move aimed at recalibrating fiscal measures related to the energy sector, the Indian government has announced a significant reduction in the windfall profit tax imposed on domestically produced crude oil and diesel exports. The adjustment, articulated in the form of a Special Additional Excise Duty (SAED), signifies a strategic shift in taxation policies to address fluctuations in the oil market.
According to an official notification released on Monday, the SAED on domestically produced crude oil has been substantially reduced from ₹5,000 per tonne to ₹1,300 per tonne. Simultaneously, the SAED on diesel exports has been revised down from ₹1 per litre to ₹0.50 per litre, aiming to realign taxation structures within the energy sector.
However, amidst these reductions, there has been a notable change in the SAED for jet fuel or Aviation Turbine Fuel (ATF) exports. The levy on ATF exports has been increased from nil to ₹1 per litre, marking a contrasting shift in taxation for this particular sector.
Notably, the SAED on petrol remains unaffected, maintaining its status quo at zero. These revised tax rates are scheduled to come into effect from Tuesday onwards.
This initiative stems from India’s introduction of windfall profit taxes on July 1 the previous year, placing the nation among those that seek to regulate supernormal profits garnered by energy companies. The government’s decision to review tax rates fortnightly, based on average oil prices in the preceding two weeks, underscores a dynamic and responsive approach towards maintaining equilibrium in the energy market.
The move holds significance within the broader context of energy pricing, intending to strike a balance between fiscal sustainability and market competitiveness. By reassessing taxation policies vis-à-vis energy exports, the government aims to streamline economic measures and adapt them to the evolving global oil landscape.
The latest revisions in windfall profit tax rates signal the government’s commitment to monitoring and optimizing fiscal measures in response to market dynamics, emphasizing a concerted effort to navigate fluctuations in the energy sector’s profitability and sustainability.
Sources By Agencies
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