The government of India has increased the windfall tax on crude petroleum and diesel from today, August 1, 2023. The new rates are as follows:
- Windfall tax on crude petroleum: Rs 4,250 per tonne, up from Rs 1,600 per tonne.
- Windfall tax on diesel: Re 1 per litre, up from nil.
The government has said that the increase in the windfall tax is necessary to "curb windfall gains" made by oil producers and refiners in the wake of rising global oil prices. The government has also said that the revenue generated from the windfall tax will be used to provide relief to consumers from rising fuel prices.
The increase in the windfall tax is likely to have a mixed impact on the Indian economy. On the one hand, it will help to reduce the government's fiscal deficit. On the other hand, it could lead to higher prices for crude oil and diesel, which could in turn have a negative impact on economic growth.
It remains to be seen how the increase in the windfall tax will play out in the long run. However, it is clear that the government is taking steps to address the rising cost of fuel in India.
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