Windfall Tax

• India recently has cut its windfall tax on petroleum crude to 1,700 rupees ($20.53) a tonne from 2,300 rupees a tone.

ABOUT WINDFALL TAX

• It is a higher tax levied by the government on specific industries when they experience unexpected and above-average profits.
• Imposing of tax
  • When the government notices a sudden increase in an industry’s revenue which cannot be linked to anything the company actively pursued, such as its business strategy or expansion, it impose this tax.
  • A Windfall Tax is imposed on an industry’s profits when it experiences a sharp increase in revenue due to unrelated external events.