India Scraps Windfall Profit Tax Amid Declining Oil Prices

The Indian government has scrapped the windfall profit tax on domestically-produced crude oil and fuel exports due to declining international oil prices. This decision, effective immediately, benefits major companies like ONGC, Reliance Industries, and Nayara Energy, while also addressing industry concerns over fiscal uncertainty.

In a significant economic development, India has decided to abolish the windfall profit tax on domestically-produced crude oil and fuel exports. This move, announced by Minister of State for Finance Pankaj Chaudhary, comes amid a notable dip in global oil prices.

The 30-month-old levy, first introduced in 2022, targeted lucrative earnings by imposing taxes on crude oil produced by firms such as ONGC and export duties on fuels handled by companies like Reliance Industries Ltd. However, with the latest notification tabled in Rajya Sabha, the government has officially rescinded these taxes.

The decision is welcomed by industry leaders who had expressed concerns over the levy affecting production incentives and profitability, highlighting the impact this future policy might have on encouraging energy sector growth.

(With inputs from agencies.)