India Reduces Windfall Tax on Petroleum Crude

India has adjusted its windfall tax on petroleum crude, reducing it to 8,400 Indian rupees ($100.66) per metric ton from 9,600 rupees, effective May 1. This decision comes after a recent increase in the tax from 6,800 rupees to 9,600 rupees per metric ton on April 16.

Key Points

Windfall Tax Adjustment

• The windfall tax on domestically produced crude oil has been reduced to Rs 8,400 per tonne, down from Rs 9,600 per tonne.
• This tax is levied as the Special Additional Excise Duty (SAED).

Unchanged Rates for Diesel and Aviation Fuel

• The windfall tax remains unchanged at zero for diesel and aviation turbine fuel (ATF).

Export Duty Status

• The Special Additional Excise Duty (SAED) on the export of diesel, petrol, and jet fuel (ATF) remains at nil.

Review Mechanism

• Tax rates are subject to fortnightly reviews, with adjustments based on average oil prices from the preceding two weeks.

India introduced windfall profit taxes in July 2022, aligning with other countries that tax supernormal profits in the energy sector.