The Indian government has announced a reduction in the windfall tax on domestically produced crude oil, lowering it to Rs 3,250 per tonne from the previous Rs 5,200 per tonne. This decision comes into effect from June 15, 2024, as stated by the Central Board of Indirect Taxes and Customs (CBIC) in a late-night notification on Friday.
The windfall tax on crude oil has been subject to several revisions recently. On June 1, 2024, the tax was reduced from Rs 5,700 per tonne to Rs 5,200 per tonne. The tax had reached its peak on April 16, 2024, when it was raised to Rs 9,600 per tonne from Rs 6,800 per tonne, driven by the rise in international crude oil prices.
India first implemented windfall profit taxes on July 1, 2022, joining several other countries that tax extraordinary profits of energy companies. The rates of the windfall tax are reviewed every two weeks based on the international crude oil prices observed in the preceding fortnight.
The export duty on petrol, diesel, and aviation turbine fuel (ATF) will remain nil, continuing the government's stance to support these sectors amid fluctuating global oil prices.
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