Government Slashes Windfall Tax on Domestic Crude Oil

The government has reduced the windfall tax on domestically-produced crude oil from Rs 2,100 to Rs 1,850 per tonne, effective from August 31, 2024. The tax on diesel, petrol, and jet fuel remains at ‘nil’. Windfall profit taxes were first imposed in India on July 1, 2022, and are reviewed bi-weekly.

The government has reduced the windfall tax on domestically-produced crude oil to Rs 1,850 per tonne, down from Rs 2,100 per tonne. This change takes effect starting Saturday.

Still levied as a Special Additional Excise Duty (SAED), the SAED on the export of diesel, petrol, and jet fuel or ATF remains at zero.

The updated rates will be effective from August 31, 2024, according to an official notification released late Friday.

India first introduced windfall profit taxes on July 1, 2022, following the example of several other countries that tax the excess profits of energy companies. These tax rates are reassessed every two weeks based on the average oil prices from the preceding fortnight.

(With inputs from agencies.)