New Delhi [India], July 20 (HornbillTV): The central government on Wednesday cut the windfall tax on crude oil to INR 17,000 per tonne from earlier INR 23,250 per tonne. This move comes amid the latest decline in global crude oil prices.

Taking into account windfall gains being accumulated by the domestic crude producers due to rising global crude prices in recent months, the Centre had on July 1 imposed a cess of INR 23,250 per tonne on crude oil. The domestic crude producers sell crude to domestic refineries at international parity prices.

A tax levied on an unforeseen or unexpectedly large profit is called windfall tax.

The new rates will be effective from today – i.e. Wednesday, a government notification said.

Besides, the recently imposed special additional excise duty at INR 13 per litre on diesel on exports has been reduced to INR 10 now.

For petrol, the export tax has been removed. On July 1, the export tax of INR 6 per litre on petrol was imposed.

As exports were becoming highly remunerative, it was noticed that certain refiners were drying out their pumps in the domestic market, an official statement had said then.

“While crude prices have increased sharply in recent months, the prices of HSD and Petrol have shown a sharper increase. The refiners export these products at globally prevailing prices, which are very high,” the government had explained the rationale behind the export tax move.