Windfall Tax On Domestically Produced Crude Oil Doubled From Today, Hiked To ₹6,000/Tonne
(MENAFN- Live Mint) The government has hiked windfall tax on domestically produced crude oil to ₹6,000 per tonne, from ₹3,250 per tonne, with effect from Tuesday.
The tax is levied in the form of Special Additional Excise Duty (SAED).
The SAED on the export of diesel, petrol and jet fuel or ATF, has been retained at 'nil'.
The new rates are effective from July 2, an official notification said.
India first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies.
The tax rates are reviewed every fortnight based on average oil prices of the previous two weeks.
Why Windfall Tax?
India started the tax on crude oil producers and on exports of gasoline, diesel and aviation fuel in July 2022 to regulate private refiners who wanted to sell fuel overseas instead of locally in a bid to gain from robust refining margins.
In July 2022, the Indian government introduced a windfall tax targeting crude oil producers. Subsequently, this tax was expanded to cover exports of gasoline, diesel, and ATF.
This policy aims to regulate private refiners and deter them from capitalising on elevated global prices by selling these fuels abroad, instead prioritizing domestic market supply.
The Finance Ministry adjusts the windfall tax rate every two weeks.
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(With inputs from PTI and Bloomberg)
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