Ministry Of Finance Increases Windfall Tax On Crude Oil, Diesel, and Aviation Turbine Fuel
In a significant move, the Ministry of Finance has issued Notification No. 26/2023-Central Excise and Notification No. 27/2023-Central Excise on August 14, 2023, announcing an upward revision of the windfall tax rates on domestically produced crude oil, diesel, and aviation turbine fuel.According to the notifications, the windfall tax on domestically produced crude oil is set to undergo...
In a significant move, the Ministry of Finance has issued Notification No. 26/2023-Central Excise and Notification No. 27/2023-Central Excise on August 14, 2023, announcing an upward revision of the windfall tax rates on domestically produced crude oil, diesel, and aviation turbine fuel.
According to the notifications, the windfall tax on domestically produced crude oil is set to undergo a substantial increase. Previously pegged at Rs 4,250 per tonne, the tax will now be raised to Rs 7,100 per tonne.
Furthermore, diesel's windfall tax has surged from 1 rupee per litre to Rs 5.50 per litre, and aviation turbine fuel has witnessed a rise to Rs 2 per litre from nil.
The revised tax rates are scheduled to take effect from August 15th, 2023, as stipulated in the official notification.
What is the windfall tax?
The windfall tax is designed to address situations where certain industries experience unexpectedly high profits due to external factors, such as favorable market conditions or sudden spikes in commodity prices. The aim is to prevent beneficiaries from reaping disproportionate benefits from such unforeseen gains. Windfall taxes are particularly relevant for industries closely tied to natural resources, commodities, and other sectors influenced by factors beyond the control of the businesses.
Click here to Read/Download Notification No. 26/2023-Central Excise
Click here to Read/Download Notification No. 27/2023-Central Excise