New Delhi: The Indian government on Monday lifted the windfall profit tax on domestically-produced crude oil and on the export of jet fuel (ATF), diesel and petrol. Minister of State for Finance Pankaj Chaudhary tabled a notification in Rajya Sabha scrapping the levy on crude oil produced by firms like state-owned Oil and Natural Gas Corporation (ONGC) and exports of fuels done by companies like Reliance Industries Ltd. The decision was taken following a decline in international oil prices.
The notification rescinded June 30, 2022 order and withdrew levy of special additional excise duty (SAED) on production of crude oil (which is refined into fuels like petrol and diesel) and on export of aviation turbine fuel (ATF), diesel and petrol. Alongside, the road and infrastructure cess (RIC) levied on export of petrol and diesel has also been withdrawn.
India first imposed windfall profit taxes on July 1, 2022. 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. A Rs 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was also levied.
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The tax rates were reviewed every fortnight based on average oil prices in the previous two weeks. While the levy on export of petrol became nil in the very first fortnightly review that happened in mid-July 2022, the tax on diesel and ATF exports became nil in mid April 2023 but were back in August that year. There has been no levy on export of ATF and diesel since March this year.
The government had garnered about Rs 25,000 crore from the levy in the first year of its implementation, Rs 13,000 crore in 2023-24 and Rs 6,000 crore this year.
Reliance Industries Ltd, which operates India’s largest only-for-export oil refinery at Jamnagar in Gujarat, and Rosneft-backed Nayara Energy are primary exporters of fuel in the country.
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