Tax on crude output, fuel exports said to add to govt. kitty by up to ₹1.3 lakh cr.
The Hindu
‘Reliance may take $12 hit to margin’
The taxes imposed by the government on domestic crude oil production and fuel exports will hit ONGC's earnings severely while shaving off up to $12 per barrel in refining margins for Reliance Industries Ltd.
The new levies will give the government up to ₹1.3 lakh crore additional revenue, brokerages said.
In a surprise move, the government had on July 1 increased import duties on gold (by 5%), added export duties on petrol and ATF (₹6/litre; $12 per barrel) and diesel ($13/litre; $26/bbl) and slapped a windfall tax on domestic crude production (₹23,250 per tonne; $40/bbl).
This follows duties imposed earlier on steel (15%) and iron ore (up 20-45%).
While the export tax will be applicable on the only-for-exports refinery of Reliance Industries (RIL), the restriction on product exports wherein at least 30-50% is first supplied domestically, will not apply to SEZ units.
HSBC Global Research in a note said that in May 2022, the government had announced a cut in the excise duty of ₹8 per litre on petrol and ₹6 a litre on diesel, which is estimated to have reduced its revenues by ₹1 lakh crore.
"The additional excise duty just announced and effective from July 1, 2022 aims to fill this revenue gap. We estimate these taxes could generate ₹1.2 lakh crore in government revenue and could also discourage the export of products which are being diverted away from the domestic market."