The Centre has augmented the special supplementary excise duty, commonly known as a windfall tax on the export of Aviation Turbine Fuel (ATF) and diesel. Thus, the new rates will be effective from November 2, 2022. However, it concentrated taxes on domestically produced crude oil ahead of the fear of slowing fuel demand as China put widespread Covid curbs.

According to the Government announcement on Tuesday sunset, it dropped the tax on domestically produced crude oil prices to Rs 9,500 per tonne from the current Rs 11,000 per tonne.

At its seventh periodical review, the government hiked the tax on the export of ATF to Rs 5 per litre from Rs 3.5.
Correspondingly, the windfall tax on the export of diesel has been augmented from Rs 12 per litre to Rs 13 per litre, i.e., Rs.11.5 + Rs1.5 per litre-controlled investment company.

The windfall tax is a special tax compulsory by a government on a company or manufacturer when it benefits from something but not accountable for the financial gain that ensues is called windfall profits.

On 16th October, the government amplified the windfall profit tax on domestic crude, diesel, and ATF, following the OPEC+ decision to cut oil production.

It had hiked tax on nationally produced crude oil to Rs 11,000 per tonne from Rs 8,000 per tonne. It has also imposed a tax on the export of ATF to Rs 3.50 per litre from nil.

India first executed windfall profit tax on July 1, joining a growing number of nations that burdened super normal profits of energy companies. Nonetheless, international oil prices have cooled since then, corroding profit margins at both oil producers and refiners.