New Delhi: The central government on Monday slashed the windfall tax levied on domestically produced crude oil by Rs 600 per tonne to Rs 1,700 per tonne, effective Tuesday.
This comes after the tax was hiked from Rs 1,300 to Rs 2,300 in the previous fortnightly revision on January 2nd. Windfall tax on the export of diesel, petrol, and ATF has however been kept unchanged at nil.
Imposed first in July 2022, the windfall tax aims to tap bumper profits earned by domestic crude producers due to high global oil prices in the aftermath of the Russia-Ukraine conflict. The rates are moderated every 15 days based on international oil prices.
As per the notification, the Special Additional Excise Duty (SAED) on the supply of crude oil by domestic companies has been revised down by Rs 600 per tonne, owing to the softening of global crude prices over the past two weeks.
The cut is expected to boost local crude supply and ease the burden on domestic refiners like IOCL, BPCL, and Reliance who rely heavily on imported oil. It may also provide some cushion to heavily taxed petrol and diesel prices in India.
However, global crude oil benchmark Brent was trading marginally higher around $78 per barrel on Tuesday after the tax cut announcement.
Going forward, the government aims to calibrate windfall taxes to ensure domestic fuel supplies keeping in mind the dynamic global oil market. The next review is due in another 15 days.
