The Central Government has again increased the Windfall Gain Tax on the export of diesel. This tax has been implemented once again on the export of airplane fuel ie ATF.
However, the tax on domestically produced crude oil has been reduced. In this regard, the government has given information by issuing a notification.
According to the notification issued by the government, the tax on export of diesel has been increased from Rs 5 to Rs 7 per liter. At the same time, a tax of Rs 2 per liter has been imposed again on the export of ATF.
The system of zero tax on the export of petrol will continue. Earlier on August 2, the government had reduced the windfall gain tax on diesel exports from Rs 11 to Rs 5 per liter. This tax was abolished on the export of ATF.
However, relief has been given on crude oil. The government has abolished the cess on crude. Earlier on August 2, the tax on domestically produced crude oil was increased from Rs 17,000 per tonne to Rs 17,750 per tonne.
Windfall tax means the tax levied on any windfall profit. If due to any reason the company gets unforeseen profit, then the government levies additional tax on this profit. There was an unexpected increase in oil prices due to the Russia-Ukraine crisis.
Due to which the oil companies had unexpectedly made huge profits. Due to which the government had decided to impose tax on this oil. At the same time, this decision of the government has also helped in increasing the domestic supply.
In fact, companies were getting a lot of profit from exports abroad. In such a situation, there was a possibility that companies could export more and more oil for higher profits. Due to which domestic supply could be affected. When crude oil was at higher levels, there were also reports of shortage of oil at petrol pumps of private companies. To limit exports, the government had announced the imposition of windfall tax on the export of oil.
In the past, the government has made this increase after cutting the tax twice. This step has been taken at a time when India’s trade deficit has reached a record level. In the data released on the first of this month, it was found that India’s trade deficit has increased to a record level in July. This happened due to the costlier imports due to higher commodity prices and a depreciating rupee.
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