Windfall Profit Tax: Digging for elusive data

Sarkari Secrets

Last week, the Union government increased the special additional excise duty (SAED) -- popularly known as Windfall Profit Tax (WPT) -- on crude oil imports from Rs 6,000 to Rs 7,000 per tonne. This is less than a third of the rate imposed two years ago when this practice of revising the SAED rates every fortnight began. The government’s tactful diplomacy has ensured that Russian crude oil flows into India at prices well below the international market rate which has wreaked havoc on many other developing economies. With more than 40% of our crude oil imports currently being sourced from Russia, WPT is designed to prevent oil companies from earning supernormal profits by importing crude cheap and selling the refined petro products at prevalent market prices while denying precious tax revenues to the government.

While we know how much crude oil is imported every month and what it costs us per barrel/tonne, sadly, the government’s response to queries about the WPT it collects from our oil companies is along expected lines -- delay, dodge and delude.

In January, I filed an RTI application with the Ministry of Petroleum and Natural Gas (MoP&NG) requesting copies of the gazette notifications (these are not easily accessible on the e-Gazette website), which declare the SAED rates applicable for the next 15 days,and details of the month-wise amounts collected from every crude oil importer. I also asked for the proactive disclosure of details of the investors who, according to the Ministry’s reply tabled in the Rajya Sabha, in August 2023, had invested about $ 1.2 billion in the P&NG sector since 2018.

The Ministry transferred this request to its Petroleum Planning and Analysis Cell (PPAC) and the Departments of Commerce, Expenditure and Revenue after almost a month, instead of within the stipulated five days. Commerce shunted it to the Department of Industrial Policy and Promotion (DIPP) which, in turn, threw it back at MoP&NG. The Ministry now kicked it over to the Departments of Revenue and Economic Affairs. PPAC sent it to the Expenditure Department again, which faithfully chucked it at the Revenue Department. Two months later, MoP&NG hurled it back to the Commerce Department. It also returned to the DIPP once more, where it lies unanswered till date.

By mid-April, I had lost count of the number of times my RTI request had been kicked around like a football. Then, the Central Board of Excise and Customs (CBEC), where it reached four times from different departments, sent identical replies that are weirdly funny, to say the least. First, CBEC said, all information about the structure of excise duties imposed is up on its website. Next, it said, the kinds of details I sought do not even constitute ‘information’ under the RTI Act. Surprisingly, it also claimed that it does not hold such information and concluded its reply asserting that tax entity-wise data cannot be shared because it is held in fiduciary capacity (trust-based relationship) and disclosure would not serve “any public interest”. So, do they have the information or do they not?

However, the positive outcome of all this is that PPAC has started publishing the most recent gazette SAED notification on its website, along with a chronological table of the variation of rates.

In 2022-23, the government collected Rs 1.47 lakh crore from SAED, a large part of which is WPT revenue. Collections are expected to rise to Rs 1.52 lakh crore in the current fiscal. But which oil company paid how much windfall profit tax remains a sarkari secret, as do the names of FDI investors in the P&NG sector. Data, the new oil, becomes as slippery, it seems, especially when it is under official control.