Govt to levy windfall tax on export of oil & gas products
NEW DELHI: The government imposed a windfall tax on exports by oil refiners and producers, announcing levies of ₹6 per litre on every litre of petrol, ₹13 on every litre of diesel, and ₹23,250 on every tonne of domestically produced crude oil in a decision aimed at increasing local supplies and boosting its revenues.
The tax was imposed after the companies were seen to be making “abnormal” profits since oil prices have shot up in global markets due to geopolitical turmoil, the Union finance ministry said.
The customs duty on gold too has been hiked from 10.75% to 15% because of a significant spurt in imports. According to official data, gold imports jumped by over 789% on an annualised basis at $6.03 billion in May this year, which is a major drag on the foreign exchange reserve.
The new levies—windfall tax on petroleum sector, and customs duty hike on gold—are effective from July 1 and the government will review exports and imports of these items every fortnight to amend its decisions, if required, the ministry said.
HT on May 27 reported that India was considering a windfall tax on petroleum products, state-owned as well as private, to offset the ballooning public expenditure on fuel, food and fertiliser subsidies amid skyrocketing inflation.
The rupee has also plummeted to lifetime lows in recent weeks, falling to 79.12 per US dollar, before it clawed back some of its value on Friday to close at 78.94 to the USD.
The drop in its value both reflects and leads to India’s ballooning import bill and current account deficit.
On the sidelines of an event marking the fifth anniversary of the goods and services tax (GST) regime, Union finance minister Nirmala Sitharaman justified the windfall tax on profits made by energy firms on the sale of domestically produced crude and exports of petrol, diesel, and ATF. “Extraordinary times require such measures,” the finance minister said.