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Windfall gain tax mop-up about 150 bln rupee so far, says govt source

Informist, Monday, Nov 28, 2022

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – The government has mopped up about 150 bln rupees so far from the additional tax imposed on windfall gains of domestic crude oil producers and petroleum product exporters following the sharp rise in oil prices globally.

 

"The collection from the windfall gains tax will be nearly 140-150 bln rupees since the taxes were imposed," a senior finance ministry official told Informist.

 

The government had imposed the tax on Jul 1 after international crude oil and product prices rose sharply following Russia's invasion of Ukraine. When it was introduced, the tax was set at 23,250 rupees per tn on crude oil and 13 rupees per ltr on diesel. The government reviews the tax every fortnight as per the price trends.

 

The price of India's crude oil basket, which had risen to a 14-year high of $128.24 a barrel on Mar 9, has since fallen and was $82.14 as on Friday.

 

Currently, the windfall tax is 10,200 rupees per tn on crude oil and 10.50 rupees per ltr and 5 rupees per ltr on export of diesel and aviation turbine fuel, respectively.

 

The government had imposed tax on windfall gains to partly offset the hit to its revenues due to a sharp cut in excise duty on petrol and diesel in May. The duty cut is estimated to cost the exchequer around 1 trln rupees per year.

 

Last week, Revenue Secretary Tarun Bajaj, in an interview to Informist, had said the mop-up from windfall tax "will not contribute too much" to government's revenues.  

 

The government's tax collections have been doing extremely well and are likely to overshoot the Budget target of 27.58 trln rupees in 2022-23 by about 2.0-3.5 trln rupees despite the excise duty cut.  End

 

US$1 = 81.73 rupees

 

Edited by Ranjana Chauhan

 

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