The government levied the windfall tax initially in July 2022 to restrict supernormal profits made by energy companies primarily during uncertain times and events
The Indian government on Tuesday scraped windfall tax on domestically produced crude oil to 'nil' per tonne with effect from September 18. The tax is levied in the form of Special Additional Excise Duty (SAED) and is notified fortnightly based on average oil prices in two weeks. The SAED on the export of diesel, petrol, and jet fuel, or ATF, has been retained at 'nil'.
The global benchmark brent crude prices have fallen to below $75 a barrel from over $92 a barrel in April.
Last month, the union government on August 31 decreased the windfall tax on domestically produced crude oil from Rs 2,100 per tonne to Rs 1,850 per tonne. Prior to this on August 17, the government revised and lowered it from Rs 2,400 per tonne to Rs 2,100.
India first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies. Additionally, it was extended to exports of gasoline, diesel and aviation fuel, as private refiners wished to sell fuel overseas to gain from robust refining margins instead of selling domestically.
This is the second time since the tax was imposed that it is decreased to zero. Previously, it was done by the government in April 2023.
With inputs from PTI.