The Indian government on Monday, January 1, announced that it has increased the windfall tax levied on crude petroleum produced in the country.
According to an official notification, the Special Additional Excise Duty or SAED, has been increased from ₹1,300 per tonne to ₹2,300 per tonne.
However, the SAED on the export of diesel was cut to zero from ₹0.5 per litre earlier. Tax on Aviation Turbine Fuel (ATF) was also slashed to nil from the earlier ₹1 per litre. SAED on export on petrol remains zero.
India had first introduced the windfall profit tax in July 2022. Back then, export duties of ₹6 per litre each were levied on petrol and ATF, while that on diesel stood at ₹13 per litre.
A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above $75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) — the difference between crude oil (raw material) and finished petroleum products — rise above $20 per barrel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
In the last fortnightly review on December 18, the government had sharply cut the windfall profit tax on crude oil produced in the country to ₹1,300 per tonne from ₹5,000 earlier. SAED on export of diesel was also cut, while that on ATF was hiked.
(Edited by : Hormaz Fatakia)
