Government Reduces Windfall Tax on Crude Oil

The Indian government has reduced the windfall tax on domestically produced crude oil from Rs 4,600 per tonne to Rs 2,100 per tonne effective August 17. The Special Additional Excise Duty on diesel, petrol, and jet fuel remains at 'nil'. Windfall profit taxes were first imposed on July 1, 2022.

The Indian government has announced a reduction in the windfall tax on domestically produced crude oil, cutting it to Rs 2,100 per tonne from the earlier rate of Rs 4,600 per tonne. This change will come into effect starting Saturday.

The windfall tax is levied as a Special Additional Excise Duty (SAED). Notably, the SAED on the export of diesel, petrol, and aviation turbine fuel (ATF) has been retained at 'nil', according to an official notification.

The new tax rates will be effective from August 17. India initially imposed windfall profit taxes on July 1, 2022, joining a global trend of taxing supernormal profits made by energy companies. The tax rates undergo review every fortnight based on the average oil prices in the previous two weeks.

(With inputs from agencies.)