A recent example of a levy of windfall profits tax is linked to the Russia-Ukraine conflict. As the conflict led to a shortage of commodities like oil and gas, their prices skyrocketed across the globe. The situation placed Indian oil companies at an advantage, due to which they made huge profits in the year 2022. A few examples include ONGC, Oil India and GAIL.
Consequently, the government levied a windfall tax on oil-producing companies to tackle its trade deficit and raise spending on food and fertilisers. The government proposed this tax in July 2022, which came into effect in September 2022.
To further tackle the shortage of energy resources in the domestic market, the government increased excise duty on the export of diesel and gasoline. The export cess on Aviation Turbine Fuel (ATF) was also revised.
However, when global oil prices went down in the global market in mid-July, some taxes were reduced while others were revised or increased.