windfall tax: Govt to get $12 billion from tax on crude in rest of fiscal year: Moody’s

The taxes imposed on domestic crude oil and fuel exports will generate close to $12 billion (Rs 94,800 crore) for the government in the remainder of the current fiscal, Moody’s Investors Service said Tuesday, while trimming profit forecasts for and .

The country’s large foreign exchange reserves remain sufficient to pre-empt any issues concerning repayment of external debt despite weakening of the rupee, it said.

The additional revenue will help offset the negative impact of the reduction in excise duties for petrol and diesel announced in late May to tame soaring inflation. “Significant additional tax revenue will offset fiscal pressure on the sovereign,” it said.

On July 1, the government imposed a “windfall” tax on the export of petrol, diesel and aviation turbine fuel (ATF), and a cess on domestically produced crude oil.

“The tax increase will reduce the profits of Indian crude producers and oil exporters like

Limited () and ONGC,” Moody’s said in a note on the new taxes.

Following the announcement, Indian oil companies will have to pay ₹6 per litre (around $12.2 per barrel) on exports of petrol and ATF, and ₹13 per litre (around $26.3 per barrel) on exports of diesel.

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