The government can remove this tax, this company including Reliance will benefit

Central Government / The government can remove this tax, this company including Reliance will benefit

Central Government - The government can remove this tax, this company including Reliance will benefit

Central Government: The Finance Ministry of India has currently decided to evaluate the country's tax system, in which there is a discussion going on to abolish the windfall tax on crude oil. If the government abolishes this tax system, it will directly benefit major companies like Reliance Industries and ONGC.

Background of Windfall Tax

The windfall tax was first implemented in July 2022. It was aimed at taxing companies that produce crude oil in the country and then sell it in the international market for better profits. Additionally, this tax was also imposed on the export of petrol, diesel and aviation fuel. The move was taken specifically because the export of refined petrol and diesel from India to European countries had increased sharply due to the ongoing war between Russia and Ukraine.

Current status

According to Prime Minister Narendra Modi's advisor Tarun Kapoor, the idea of abolishing the windfall tax on locally produced crude oil is being considered because now this tax has lost its relevance. Compared to 2022, crude oil prices have fallen significantly globally, and in such a situation, this tax seems unnecessary.

While talking to reporters, Kapoor also told that the Petroleum Ministry has started discussions with the Finance Ministry on this subject. The discussion is focused on how the abolition of the tax will benefit domestic companies and provide stability to the country's energy sector.

Possible benefits to Reliance and ONGC

If the government abolishes the windfall tax, then the biggest benefit will be to companies like Reliance and ONGC. The abolition of this tax will increase the refining margin of these companies, which is also likely to improve their profits. This will not only improve the financial condition of these companies, but it will also be a positive sign for the Indian economy.

Potential Impact and Future

If the Finance Ministry decides to abolish this tax, it will prove to be a significant change in India's energy sector. This will not only boost domestic production but will also increase the competitiveness of Indian companies, especially in the international market.

To summarise, the move to abolish the windfall tax can be an important strategic decision for the Indian government, which can prove to be beneficial not only for energy companies but also for the overall economy. Steps taken in this direction can have a profound impact on Indian industry and market, and will also strengthen India's energy security.