Every day you must be hearing that today the windfall tax has gone, today the windfall tax has been reduced.
What is windfall tax?
See, if you want to understand simply about windfall tax, then understand that suppose it is available outside India for Rs. 100 and its price in India is currently Rs. 110. So, you will be charged extra charges on those extra ten rupees you are earning. So this. It will not go in your pocket, the government will take it from you. So this ten rupees extra is the windfall tax,
Globally the price of crude is very low. Crude prices are very high in India. That means the prices of petrol and diesel are very high, so that is not the extra pricing that is going on in India. No company can earn that pricing, it is the government that needs the money, and that is why the government has imposed the infall tax.
So what is the impact of this?
Oil marketing companies have become refiners and companies like you, ah, reliance have become companies which sell oil. Refining etc. This has some effect on them but when our windfall tax was at its peak it was around ten rupees per ton. Now it is fifteen hundred and eighteen hundred, sometimes it is eighteen hundred to twenty-two hundred and sometimes it becomes twenty-two hundred to eighteen hundred. Now there is a difference of four hundred rupees per ton, a difference of forty paise; hence, the windfall tax being less basic does not have much effect.