Windfall Profit Tax: FICCI said that apart from this, Windfall Profit Tax is calculated on the basis of per ton production. It is not calculated according to the percentage of the value received. In such a situation, there are problems for the oil producers when the price decreases.
Industry body FICCI has demanded the government to abolish windfall profit tax on domestically produced crude oil in the upcoming general budget (Budget 2023). The industry body has said that this type of tax is badly affecting the investment based oil and gas sector. The Board of Industries has made this demand in the recommendations given to the government for the general budget. For the first time, the country imposed windfall profits tax on July 1 last year. With this, India has joined the list of countries that tax energy companies on higher than normal profits. At that time, a windfall profit tax of Rs 23,250 per tonne ($40 per barrel) was imposed on domestic crude oil. A new tax has also been imposed on the export of petrol, diesel and aviation fuel ATF. It is reviewed every fortnight on the basis of international crude oil prices.
Industry body FICCI, in its recommendations for the budget, has said that such a tax is in addition to all other existing charges. FICCI said, “Special Additional Excise Duty (SAED) on petroleum crude should be removed or if it needs to be continued for some time as an extraordinary measure, its rate should be limited.” FICCI said that this windfall profit tax is in addition to other charges.
FICCI said that apart from this, windfall profit tax is calculated on the basis of per tonne production. It is not calculated according to the percentage of the value received. In such a situation, there are problems for the oil producers when the price decreases.
FICCI said, “This is affecting the investment proposals of Tax Research and Development.”
Sunil Duggal, Group Chief Executive Officer (CEO) of Vedanta Limited, said that at present, domestic crude oil producers are taxed at around 70 per cent. The tax structure of 35-40 percent, following global standards, will encourage significant investment in this sector.
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