New Delhi: The government on Thursday increased windfall tax on export of diesel to Rs 7 per liter and brought back a tax on it. jet fuel exportBut in line with the softened rates, the levy on domestically produced crude was reduced.
In the third fortnight review, the government raised windfall tax on diesel exports from Rs 5 per liter to Rs 7 per liter and brought tax on ATF exports by Rs 2 per liter, a finance ministry notification showed.
Earlier this month, the government abolished windfall tax on ATF (Aviation Turbine Fuel) exports.
Also, the tax on domestically produced crude oil has been reduced from Rs 17,750 to Rs 13,000 per tonne.
Taxes on exports have been increased as cracks or margins widened, but reduced on domestically produced oil as international oil prices hit a six-month low.
India imposed windfall tax for the first time on July 1, joining a growing number of countries that tax super ordinary profits of energy companies. But international oil prices have cooled since then, reducing profit margins for both oil producers and refiners.
On July 1, an export duty of Rs 6 per liter ($12 a barrel) was imposed on petrol and ATF and Rs 13 a liter on exports of diesel ($26 a barrel). A windfall tax of Rs 23,250 per tonne was also imposed on domestic crude oil production ($40 per barrel).
Subsequently, in the first fortnightly review on July 20, the export duty of Rs 6 per liter on petrol was abolished, and the tax on export of diesel and jet fuel (ATF) was reduced by Rs 2 per liter to Rs 11 per litre. was. 4, respectively. Tax on domestically produced crude was also reduced to Rs 17,000 per tonne.
Subsequently, on August 2, following a crackdown in the refinery or a fall in margins, the export tax on diesel was reduced to Rs 5 per liter and the export tax on ATF was abolished. But the duty on domestically produced crude was increased to Rs 17,750 per tonne in line with the marginal increase in international crude oil prices.
In the third fortnight review, the tax on fuel exports has been increased but the tax on domestically produced crude oil has been cut.
The reduction in taxes earlier this month came as India’s trade gap hit a record high in July as commodity prices rose and a weaker rupee pushed up the country’s import bill.
The gap between exports and imports widened to $31.02 billion in July from $26.18 billion in June. This, as a result of fall in exports and rise in commodity prices coupled with a weaker rupee, is pushing up the import bills. Imports grew 43.59 percent in July compared to a year ago, while exports fell 0.76 percent.
Since then, international oil prices have dropped below $95 a barrel, but the rift between diesel and ATF has widened.
Industry sources said the government is working on the principle of leaving some healthy margins with both crude oil producers and refiners making more profit out of it.
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