The Indian government has decided to reduce the windfall tax on petroleum crude from Rs 6,400 per tonne to Rs 4,100 per tonne. The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, in a bid to provide some relief to the oil refining industry.
The windfall tax was first introduced in 2011, and is levied on domestic crude oil production when the price of the Indian basket of crude oil exceeds $60 per barrel. The tax is intended to help the government capture a portion of the profits made by oil refining companies when oil prices are high.
However, the tax has been a source of contention for the industry, with many players arguing that it is unfair and puts them at a disadvantage compared to their global competitors. The reduction in the windfall tax is expected to provide some relief to the industry, which has been hit hard by the COVID-19 pandemic and the subsequent drop in demand for petroleum products.
The decision to reduce the windfall tax was welcomed by industry players, who said that it would help to improve the competitiveness of the Indian refining industry. They also called on the government to consider further measures to support the industry, such as reducing the tax on diesel and petrol.
The move is also expected to have a positive impact on the overall economy, as the oil refining industry is a major contributor to India’s GDP. With the reduction in the windfall tax, the industry will have more money to invest in new projects and technologies, which will help to create jobs and drive economic growth.
Overall, the reduction in the windfall tax is a welcome move for the oil refining industry, and is expected to provide some relief in a challenging economic environment. With further measures likely to be announced in the coming months, the industry is hopeful that it will be able to bounce back and play a key role in driving India’s economic recovery.
