Centre Hikes Windfall Tax On Domestic Crude Oil From Today

The windfall tax on petrol and aviation turbine fuel has been left unchanged. The windfall tax rates are reviewed every fortnight by the government reviews to calibrate the tax mop-up

Earlier in May, the government had cut windfall gains tax on domestically-produced crude oil to nil, while continuing the rate at zero on the export of diesel and ATF. ( Image Source :Getty )

The central government has increased windfall tax on domestic crude oil with effect from today, reported news agency ANI. As per the latest hike, Special Additional Excise Duty (SAED) on crude petroleum has been increased from Rs 1,600/tonne to Rs 4,250/tonne. SAED on diesel has been hiked from Nil/litre to Rs 1/litre, the report said. The windfall tax on petrol and aviation turbine fuel has been left unchanged.

The windfall profit taxes were first imposed on July 1, 2022, as India joined a growing number of nations that tax super normal profits of energy companies. At that time, petrol and ATF attracted export duties of Rs 6/litre ($12 per barrel) each, and Rs 13/litre ($26 a barrel) was levied on diesel. A Rs 23,250/tonne ($40 per barrel) windfall profit tax on domestic crude production was also levied.

The tax rates are reviewed every fortnight by the government reviews to calibrate the tax mop-up.

Central Government increases windfall tax on domestic crude oil with effect from today.

Special Additional Excise Duty (SAED) on crude petroleum increased from Rs 1600/tonne to Rs 4250/tonne. SAED on Diesel will increase from Nil/litre to Rs 1/litre. pic.twitter.com/S4SgIRZynw

— ANI (@ANI) August 1, 2023

Earlier in May, the government had cut the windfall gains tax on domestically-produced crude oil to nil, while continuing the Zreo rate on the export of diesel and Aviation Turbine Fuel (ATF).

According to an official order dated May 15, the government had slashed the special additional excise duty (SAED) on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) to nil from Rs 4,100/tonne with effect from May 16, 2023, PTI reported.

On April 4, the government slashed the windfall tax on petroleum crude to zero from Rs 3,500/tonne. The levy on crude was hiked to Rs 6,400/tonne on April 19.

As per a CNBC report, the global crude oil prices have risen again as a result of supply restrictions by Saudi Arabia and Russia, and the Indian crude oil basket, which had averaged less than $75/bbl in May and June this year, reached $80.92/bbl on July 13.