Windfall tax on petroleum crude, ATF, diesel retained at zero

The government has decided to continue with zero windfall tax for June 2023, continuing with May 16 windfall tax rates. There is no requirement for a fresh notification as old rates of nil windfall tax continues, according to the new notification by the government.

The May 16 windfall tax notification had reduced the special additional excise duty on petroleum crude to nil from ₹4,100/tonne. It averaged $74.98 a barrel in May and So far in June the average has managed to be below $75/bbl. 

Also Read: Centre cuts windfall tax on domestic crude oil to Rs3,500 per tonne

The nil windfall tax continued in the subsequent notification on June 4. The same windfall tax regime will now continue till the government notifies new rates. The government has kept $75 as the trigger for windfall tax levy, below which the tax is zero, according to reports. India’s crude oil basket has been consistently averaging below $75/bbl.

Earlier this month, Mint had reported that despite imposing a windfall tax on the super profits of oil explorers and refiners, the central government's excise duty collections from petroleum sector have shown a contraction of over ₹71,800 crore or 18 per cent in FY23 owing to reduction in the duty rate announced at the beginning of last fiscal, showed the provisional data of central government finances for the just concluded financial year.

However, revenue collection from consumption, or GST, has shown a 20 per cent jump year-on-year in FY23 while customs duty has improved by close to 7 per cent, helping to make up for the decline in receipts from energy taxes.