Windfall Tax on crude petroleum reduced to Rs 4,600 per tonne

Windfall tax on crude: The government has reduced the windfall tax on domestically produced crude oil to Rs 4,600 per tonne from the previous Rs 7,000 per tonne, effective August 1.

This tax is applied as a Special Additional Excise Duty (SAED). However, the SAED on the export of diesel, petrol, and jet fuel (ATF) remains at nil.

India first introduced windfall profit taxes on July 1, 2022, joining several nations in taxing the supernormal profits of energy companies. The tax rates are reviewed every fortnight, based on the average oil prices over the prior two weeks.

The windfall tax is adjusted every fortnight based on fluctuations in international crude and product prices. Governments impose this tax when an industry unexpectedly earns large profits, typically due to an unprecedented event.

Recently, crude oil prices have been trading below $80 per barrel, influenced by concerns over demand from China, the world's largest oil consumer, and easing tensions in the Middle East.

(With PTI inputs)