The Centre has decided to reduce windfall tax on crude oil produced inside India to zero per tonne with effect from September 18, 2024, an official notification declared on September 17. This tax is usually charged in the form of Special Additional Excise Duty (SAED). The Centre has a relook at this tax once every 15 days and the decision is based on the average crude oil prices in the past two weeks.
According to this principle, the Centre undertook the last such revision on August 31. At that time the windfall tax on crude petroleum was fixed at the level of Rs 1,850 per tonne.
Milk supernormal profits
It needs to be mentioned that the objective of a windfall tax is to raise revenue from supernormal profits that various industries might take taking advantage of macroeconomic conditions or some particular tailwinds that might be a fetaure of any industry at any given point of time. The government then redistributes these resources thus raised from corporates.
According to the lastest decision the Special Additional Excise Duty on the export of all petroleum products — petrol, diesel and ATF (aviation turbine fuel) — has been set at zero.
Since 2022
In its latest avataar, New Delhi began charging windfall taxes for the first time on July 1, 2022. In the process India joined a number of countries that were raising resources from different companies mainly in the energy sector and making supernormal profits from it.
When Indian oil companies began to make abnormally high profits following the galopping cude prices after the Russia-Ukraine conflict, the Centre began raising resources from the energy sector.
British example
Prominent economies have charged windfall taxes down the years. One of these countries have been the UK. According to reports, the Conservative Party has levied windfall taxes on at least 3 occasions in the past 40 years. Former British Prime Minister Rishi Sunak also imposed windfall taxes on energy companies. In 1981, George Osborne, the chancellor of the British exchequer during the rule of Prime Minister Margaret Thatcher imposed windfall taxes on banks.
The government revises windfall tax once every 15 days and it is charged as special additional excise duty. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
