Government Slashes Windfall Tax on Domestic Crude Oil to ₹3,250 per Tonne

In a significant move, the government has announced a reduction in the windfall tax on domestically-produced crude oil, lowering it from ₹5,200 per tonne to ₹3,250 per tonne. The new rates, effective from June 15, were confirmed through an official notification.

This tax, levied as a Special Additional Excise Duty (SAED), remains unchanged for the export of diesel, petrol, and jet fuel (ATF), which continue to be taxed at ‘nil’.

India initially imposed windfall profit taxes on July 1, 2022, aligning with several other countries that have introduced similar measures to tax the supernormal profits of energy companies. These tax rates are reviewed every fortnight, taking into account the average oil prices over the preceding two weeks.

The decision to reduce the windfall tax reflects the government’s responsive approach to fluctuating global oil prices and aims to provide relief to domestic crude oil producers.