The central government has increased the windfall tax on crude oil by 37 per cent per tonne. From now on, the Narendra Modi-led NDA government will charge Rs 11,000 on domestically produced crude oil as windfall tax, instead of Rs 8,000, according to multiple media reports.
The revised tax rate will be effective from October 16, 2022.
Apart from hoisting the windfall tax on crude oil, the centre has also made some other significant changes as well. The NDA government has raised the additional excise duty on aviation turbine fuel from zero to Rs 3.5 per litre. The special additional excise duty on the export of diesel has also been increased to Rs 10.5 per litre from Rs 5. This revision has taken the total excise duty on the export of diesel to Rs 12 per litre including the Rs 1.50 per litre road and infrastructure cases.
Why Has Centre Revised Tax Rates?
The volatile movement in brent crude prices can be taken into consideration behind this tax hike. For the past two weeks, the prices of brent crude oil in the international market have been rising. A barrel of brent crude oil is priced at $91.63.
Considering the hike in price, OPEC+( the alliance of the Organisation of the Petroleum Export Countries and other major oil exporting countries including Russia) decided to reduce production by 2 million barrels per day from November. This decision has given birth to major dissatisfaction in the Biden administration. The US Treasury secretary Janet Yellen said this move by the OPEC+ is 'unhelpful and unwise' for the global economy. It may cause damage to emerging markets, already suffering from high energy prices.
