New Delhi: The government announced a hike in special additional excise duty (SAED) on crude petroleum on Friday. This hike takes the duty on crude petroleum to Rs 10,000 per tonne and will come into effect from September 16, the official release from the finance ministry noted.
The government also reduced the SAED or duty on the export of diesel from the current rate of Rs 6 per litre to Rs 5.50 per litre. Additionally, duty on jet fuel or ATF has also been reduced to Rs 3.5 per litre from Rs 4 per litre. However, the SAED on petrol will continue to be nil, reported PTI.
This decision will increase the windfall tax on domestically produced crude oil which was set at Rs 6,700 per tonne. Crude oil prices have been on the rise for the past three weeks and the Brent crude benchmark crossed the $94 per barrel mark on Friday. This development will impact oil exploration companies.
Notably, India started imposing windfall profit taxes on July 1 last year joining countries levying taxes on abnormal profits of oil-producing companies. The tax rates are reviewed every two weeks on the basis of average oil prices in the previous two weeks.
The government imposes tax on windfall profits of oil producers once they get a price above the ceiling of $75 per barrel. The tax on fuel exports is decided on the basis of margins earned by refiners on overseas shipments. These margins reflect the difference between the international oil price realised and the cost.
