Centre slashes Windfall Tax to Rs 13,000 per tonne, reintroduces levy on ATF, increase levy on Diesel

The government on Thursday reduced the windfall tax on petroleum crude marginally to Rs 13,000 per tonne from Rs 17,750 per tonne after crude oil prices reached 6 months low.

The centre, however has increased levy on diesel exports to Rs 7 per litre from earlier Rs 5 per litre and reintroduced levy on aviation turbine fuel exports to Rs 2 per litre.

This is the third revision. On August 2, the centre removed the Rs 4 per litre levy on aviation turbine fuel exports and raised the windfall tax on petroleum crude marginally to Rs 17,750 per tonne from Rs 17,000 per tonne.


The levy on petrol exports was removed in the July 19 revision.

The cess is reviewed fortnightly taking into consideration the global crude prices.

International oil benchmark Brent crude prices fell to $91.51, the lowest since February. At the last review meeting, the crude oil prices were around $100-103 per barrel.

The government had initially imposed a Rs 23,250 per tonne cess on domestically produced crude oil. It was reduced to Rs 17,000 per tonne on July 20 following softening in the global crude oil.

The Rs 6 per litre tax on petrol exports was scrapped while that on diesel and aviation fuel was reduced by Rs 2 a litre each to Rs 11 and Rs 4, respectively.

The new rates will be applicable from August 19, according to a notification issued by the finance ministry late Thursday evening.

The government has maintained that the levy was introduced in view of the windfall gains made by the domestic crude producers and refiners due to high global crude and product prices.

The government had said it will review the windfall levy on locally produced crude oil every fortnight.

The levy was expected to compensate for the reduction in the excise duty on petrol and diesel to provide relief to consumers. But the reduction in the windfall cess from the initial levels is expected to reduce the realisation for the government.