Vedanta cuts $91 mn from govt's gains to make up for tax paid
Published On: Friday, March 24, 2023 | By: Team KnowMyStock
In signs of protests against the 9-month-old windfall tax, mining mogul Anil Agarwal's Vedanta Ltd has withheld about USD 91 million from the share of profit due to the government from its oil and gas fields, to make up for the additional tax outgo, according to sources and correspondence on the issue. India first imposed windfall profit tax on July 1, 2022, joining a growing number of nations that tax super normal profits of energy companies. But the levy of Special Additional Excise Duty (SAED) on locally produced crude oil was seen by producers as a violation of the contract which provides fiscal stability. The SAED initially was Rs 23,250 per tonne ($40 per barrel) and in fortnightly revisions brought down to Rs 3,500 per tonne. This is in addition to the 10-20 percent royalty on price of oil and gas realized and an oil cess of 20 %. On top, the government is also entitled to a pre-decided share of profit after expenses are deducted from revenue earned from sale of oil and gas.
Vedanta on January 31 and on February 20 informed the ministry of petroleum and natural gas that it has made a deduction of USD 85.35 million for SAED paid on its prolific Rajasthan block, RJ-ON-90/1, and another USD 5.50 million for block CB-OS/2 in Cambay basin.
This was being done with a view to restore economic benefits as mentioned in the signed contracts under which it operates, the correspondence, reviewed by PTI, showed.
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