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December 4, 2023 2:19 pm

Windfall tax on crude oil, diesel hiked

The Fact News Service
New Delhi, August 15

The government has hiked the windfall profit tax on crude oil produced in the country and on export of diesel, while bringing back the levy on overseas shipments of ATF.

The tax, levied in the form of special additional excise duty, on domestically produced crude oil has been raised to Rs 7,100 per tonne from Rs 4,250 per tonne, according to an official notification.

Besides, the special additional excise duty (SAED) on the export of diesel has been increased to Rs 5.50 per litre from Re 1 per litre.

A duty of Rs 2 per litre will be imposed on the export of jet fuel or ATF with effect from August 15. There was no SAED on jet fuel prior to this levy.

The special additional excise duty on petrol will continue to be zero. The new tax rates come into effect from Tuesday, the order dated August 14, said.

India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax supernormal profits of energy companies.

At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF and Rs 13 a litre (USD 26 a barrel) on diesel.

The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above USD 75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) rise above USD 20 per barrel.

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