Govt trims windfall tax on crude petroleum

 New Delhi: The government has cut the windfall tax on domestically-produced crude oil to Rs1,700 per tonne from Rs2,300 per tonne with effect from Tuesday. The tax is levied in the form of Special Additional Excise Duty (SAED). According to an official notification, SAED on export of diesel, petrol and jet fuel or ATF has been retained at nil. The new rates are effective from January 16. India first imposed windfall profit taxes on July 1, 2022, joining a growing number of nations that tax supernormal profits of energy companies. The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

ONGC, OIL to gain

Indian oil companies will gain after the Centre’s decision to lower windfall tax on crude oil as oil prices have come down in the international market. The reduction benefits upstream oil companies ONGC and Oil India Ltd as their tax outgo on sales of crude will come down.

The government had first imposed the windfall tax on crude oil in July 2023 amid soaring crude oil prices.

It also extended the tax to exports of gasoline, diesel and aviation fuel after private refiners started making gains from robust refining margins in overseas markets, instead of selling in the domestic market.