Windfall Profit Tax Reasons for additional taxation
Windfall Tax and effect
What is windfall profit tax?
Windfall Profit Tax Reasons:
What is windfall profit tax?
Special Additional Excise Duty or SAED or windfall profit tax is a tax imposed on domestically produced crude oil by private refiners if the international price of crude oil rises above $75 per barrel.
What is windfall profit tax imposed?
It is generally believed that taxes and levies imposed on crude oil will provide the level playing field for importers based on $75 per barrel. if prices rise for imported oil above $75 per barrel then imported oil becomes costlier than domestic oil, thereby giving supernormal profits to domestic oil companies, to offset this imbalance windfall tax is imposed. windfall tax imposed on domestic crude oil producers and refines makes exports less profitable and also creates level playing field.
When was windfall profit tax imposed?
India had first introduced the windfall profit tax in July 2022.
How often are tax rates changed?
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
windfall profit tax news
According to an official notification, the Special Additional Excise Duty or SAED, has been increased from ₹1,300 per tonne to ₹2,300 per tonne.
Crude oil production in FY 2018-19 was about 34.20 Million Metric Tonne (MMT). About 71.15% of crude oil is by ONGC and OIL from nomination regime and remaining 28.85% of crude oil production is by Private/JV companies from PSC regime.