The Govt. reduces the windfall tax on crude oil output and diesel exports

The tax on crude oil produced by companies such as the state-owned Oil and Natural Gas Corporation (ONGC) has been reduced from $10,200 per tonne to $4,900 per tonne.

The government reduced the rate on diesel export to 8 per litre from 10.5 per litre in the fortnightly revision of windfall profit tax. The levy includes a road infrastructure cess of 1.5 cents per litre. The special additional excise duty on petrol remains nil, while that on aviation fuel ATF remains at 5 per litre.

While the windfall profit tax is calculated by deducting any price above a threshold, the levy on fuel exports is based on cracks or margins earned by refiners on overseas shipments. These margins are primarily defined by the difference between the realised international oil price and the cost.

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