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Government slashes windfall tax on domestically produced crude oil to Rs 6,300 per tonne

On the export of diesel, the tax was reduced to Re 1 per litre from Rs 2 per litre in line with softening international oil prices

Our Special Correspondent New Delhi Published 17.11.23, 07:50 AM
oil balance

oil balance Sourced by the Telegraph

The government has slashed the windfall tax on domestically produced crude oil to Rs 6,300 per tonne from Rs 9,800 per tonne and on the export of diesel, the tax was reduced to Re 1 per litre from Rs 2 per litre in line with softening international oil prices.

The tax is levied in the form of a Special Additional Excise Duty or SAED. The levy on the export of jet fuel or ATF and petrol will continue to be zero. The new tax rates came into effect from Thursday, a notification said.

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At the last revision effective from November 1, the government had increased the tax on crude oil to Rs 9,800 per tonne from Rs 9,050 per tonne. The levy on diesel export was halved to Rs 2 and that on jet fuel was brought to nil from Re 1 per litre.

International oil prices have softened since the last revision, necessitating the reduction. The basket of crude oil that India imports has averaged $84.78 per barrel this month against $90.08 a barrel average in October and $93.54 in September.

A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above $75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) rise above $20 per barrel.

India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax supernormal profits of energy companies.

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