The Government on Thursday announced reduction in windfall tax on locally produced oil, which has been brought down to Rs 4,900 per tonne. In addition to this, it also cut export tax on diesel to Rs 6.5 per litre.
These rates would come into effect from December 2, 2022.
Windfall tax, which is also known as special additional excise duty, was brought in by the government on July 1 this year to tax the industry on extraordinary profits, which it earned through sale of refined crude in global markets.
The government reviews this tax every fortnight.
Several nations tax extraordinary profits of energy companies. When the government had introduced windfall tax in July, export duty of Rs 6 per litre each was levied on petrol and jet fuel. In addition to this, export duty of Rs 13 per litre was also imposed on diesel.
Several major oil companies were hit by this tax and some of them had urged the government to withdraw it and rather adopt the dividend method to seek accruals.