: Govt hikes windfall profit tax on export of diesel to `7 per litre #finance #StockMarketNEWS #Business Indo-Asian News Service New Delhi The government on Thursday hiked the windfall profit

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Govt hikes windfall profit tax on export of diesel to `7 per litre #finance #StockMarketNEWS #Business
Indo-Asian News Service

New Delhi

The government on Thursday hiked the windfall profit tax on the export of diesel to `7 per litre and brought back a tax on jet fuel exports, but slashed the levy on domestically produced crude oil in line with softening rates.

At the third fortnightly review, the government raised the windfall profit tax on the export of diesel to `7 per litre from `5 a litre and brought a `2 a litre tax on ATF exports, a finance ministry notification showed.

Earlier this month, the government had scrapped the windfall profit tax on ATF (Aviation Turbine Fuel) exports.

Alongside, the tax on domestically produced crude oil has been cut to `13,000 per tonne from `17,750.

The tax on exports has been raised as cracks or margins rose but the same on domestically produced oil was reduced as international oil prices slid to a six-month low.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that taxes super normal profits of energy companies. But international oil prices have cooled since then, eroding profit margins of both oil producers and refiners.

On July 1, export duties of Rs 6 per litre ( per barrel) were levied on petrol and ATF and a `13 a litre tax on the export of diesel ( a barrel). A `23,250 per tonne windfall profit tax on domestic crude production ( per barrel) was also levied.

Thereafter, in the first fortnightly review on July 20, the `6 a litre export duty on petrol was scrapped, and the tax on the export of diesel and jet fuel (ATF) was cut by `2 per litre each to `11 and `4, respectively. The tax on domestically produced crude was also cut to `17,000per tonne.

Thereafter, on August 2, the export tax on diesel was cut to `5 a litre and that on ATF scrapped, following a drop in refinery cracks or margins.

But the levy on domestically produced crude oil was raised to Rs 17,750 per tonne in line with a marginal increase in international crude prices.

At the third fortnightly review, the taxes on fuel exports has been raised but that on domestically produced crude oil has been cut.

The reduction in taxes earlier this month came as India’s trade gap swelled to a record high in July as elevated commodity prices and a weak rupee inflated the country’s import bill.

The gap between exports and imports widened to . 02 billion in July from . 18 billion in June. This, as a result of exports falling and elevated commodity prices together with a weak rupee, are inflating the import bill. Imports jumped 43. 59% in July from the year-ago month, while exports dropped 0. 76%.

International oil prices have since then slid to below per barrel but cracks on diesel and ATF rose.