Centre reimposes windfall tax on crude oil; scraps duty on diesel

Led by the rising oil prices globally, the central government has revised the windfall tax on domestically produced crude oil.

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The Indian government has re-imposed the windfall tax on domestically produced crude oil and has withdrawn the Special Additional Excise Duty (SAED). The windfall tax on all domestically produced crude oil has been revised to Rs 6,400 per tonne from nil. The revised Special Additional Excise Duty (SAED) on diesel now stands at nil, from Rs 0.5 per litre imposed earlier. In addition to this, the export duty exemption for Petrol and Aviation Turbine Fuel (ATF) will continue. 

According to a notification issued by the Central Board of Indirect Taxes and Customs (CBIC), the revised duty rates will be effective from April 19. In the last revision, the Central Government reduced the windfall profit tax on domestically produced petrol to zero while the levy on the export of diesel was reduced to ₹0.50 per litre.

The windfall tax is a special additional excise duty which is levied to absorb the ‘super-profits’ earned by domestic crude oil producers due to high global crude product prices. The central government revises the windfall tax every fortnight based on average oil prices in the previous two weeks. The latest revision in the levies is due to rising oil prices, which have climbed up following a surprise decision by OPEC plus countries to cut output.