Union Budget 2023: Industry body FICCI has demanded the government to abolish Windfall Tax on domestically produced crude oil in the upcoming general budget . The industry body has said that this type of tax is badly affecting the investment-based oil and gas exploration sector. The Board of Industries has made this demand in the recommendations given to the government for the general budget. The country had imposed Windfall Tax for the first time on July 1 last year . With this, India joined the list of countries that tax energy companies on higher than normal profits. At that time Windfall Tax of Rs 23,250 per tonne ($40 per barrel) was imposed on domestic crude oil.
Special extra excise duty should also be removed
A new tax has also been imposed on the export of petrol, diesel and air turbine fuel ie ATF. It is reviewed every fortnight on the basis of crude oil prices at the international level. 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 that 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 capped. FICCI said that this windfall tax is in addition to other charges.
problems for oil producers
FICCI said that apart from this, windfall 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 that this tax is affecting the investment proposals of R&D. 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 per cent, in line with global standards, will encourage significant investment in this sector.
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