In a move to counter the ongoing fluctuations in global crude oil prices, the Union government announced a significant reduction in the windfall tax on crude petroleum.
The tax has been lowered to Rs 6,300 per tonne from Rs 9,800, marking a notable adjustment in the fortnightly review of Windfall gains tax conducted on 16 November.
Simultaneously, the special additional excise duty (SAED) on diesel has been halved to Rs 1 from Rs 2 per litre, according to the official notification.
The windfall tax on aviation turbine fuel and petrol, however, remains unaffected, standing at nil.
As reported by Moneycontrol, These decisions are part of the government's strategy to adapt to the dynamic nature of global crude oil markets.
This announcement comes amidst persisting volatility in crude oil prices globally, with signals of increased supply from the United States coupled with concerns about subdued energy demand from Asia.
In the previous fortnightly review on 31 October, the government had raised the windfall tax on petroleum crude to Rs 9,800/tonne from Rs 9,050/tonne, effective from 1 November.
India had initially introduced windfall profit taxes on 1 July last year, aligning with several other nations that tax supernormal profits of energy companies.
At that time, export duties were imposed on petrol, aviation turbine fuel (ATF), and diesel.
Additionally, a windfall profit tax of Rs 23,250 per tonne ($40 per barrel) was implemented on crude oil produced by companies like the Oil and Natural Gas Corporation (ONGC).
The windfall tax rates undergo regular reviews every fortnight, based on average oil prices from the preceding two weeks.
A windfall tax is imposed on domestic crude oil if global benchmark rates exceed $75 per barrel.
Nayan Dwivedi is Staff Writer at Swarajya.
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