The central government on Monday reduced the windfall profit tax levied on domestically produced crude oil and the export of diesel.
The Special Additional Excise Duty (SAED), as the levy is officially known, has been cut to Rs 1,300 per tonne of crude oil from Rs 5,000 per tonne earlier.
The tax on the export of diesel has also been lowered to Rs 0.5 per litre from Rs 1 per litre. However, SAED on aviation turbine fuel (ATF) exports have been introduced at Rs 1 per litre.
The revised tax structure will be effective starting Tuesday, as per a government notification.
India first imposed the windfall levies from July 1 last year on domestically produced oil and fuel exports by domestic refiners as their margins swelled on global energy price surge.
The taxes are reviewed every fortnight based on average international oil prices in the previous two weeks.
The reduction comes on the back of softening global crude prices since the last review. However, ATF has been brought under export duties now.
When imposed last July, India levied duties of Rs 6/litre on petrol and ATF and Rs 13/litre on diesel.
The windfall tax applies to domestic crude oil when prices breach $75/barrel. For fuel exports, it kicks in if refinery margins top $20/barrel.
