Windfall Tax, it is a high tax rate on profits that a particular company or industry receives from sudden windfall profits. Windfall tax is a one-time tax levied on companies. This tax is levied on companies that make profits not because of their products, but because of certain circumstances.
Unexpected taxes have been imposed in various countries around the world, including wind power in Mongolia, Australia and Turkey. In the United Kingdom, an initial one-time untaxed tax was imposed on certain bank deposits as part of the 1981 budget under Margaret Thatcher. In 2022, Boris Johnson’s government announced an unexpected tax for energy companies to help fund a package to address the cost of living crisis in Britain.
For example, due to the invasion of Ukraine and Russia, petroleum product prices have jumped worldwide and in India, many companies including Reliance Industries, ONGC have made huge profits. Oil companies have increased the export of oil products in the markets in the past with the intention of earning more profit. On July 1, 2022, the government had implemented Windfall Tax on companies doing this. The government did this to increase the supply and revenue of oil in the domestic market.
Export duty on diesel increased by Rs 13 per liter. At the same time, there was an increase of Rs 6 a liter on petrol. The export duty on Air Turbine Fuel (ATF) has been increased by 1 Indian Rupee per liter. Indian exporters will have to sell 50% petrol and 30% diesel in the domestic market on the total shipping bill. An additional cess of INR 23,250 per tonne has been imposed on crude oil produced in the country.