India Likely to End Windfall Tax Review As Oil Prices Stabilise

New Delhi: The Union finance ministry is likely to discontinue the revision of windfall tax on the export of petrol, diesel and aviation turbine fuel or diesel as global crude oil prices have stabilised to some extent. The finance ministry in consultation with the oil ministry will take a call soon and will review the efficacy of windfall tax, a top ministry source said.

The government in September slashed the windfall tax on domestically produced crude oil to 'nil' per tonne. The tax is levied in the form of special additional excise duty or SAED and is notified fortnightly based on average oil prices in two weeks.

India first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies. Phenomenal profits made by some oil refiners on exporting fuel at the expense of domestic supplies had prompted the government to introduce an export tax on petrol, diesel and ATF in July 2022.

As per the source, the ministry of petroleum and natural gas has already written to the finance ministry in this regard. "We raised this issue with the top officials in the finance ministry, which will review the windfall tax and tax being mobilised out of this. Besides, we urge the ministry to consider bringing natural gas under the GST ambit," an oil ministry official said.

India saw the last such revision, which took place effective August 31 when the windfall tax on crude petroleum was set at Rs 1,850 per tonne. The SAED on the export of diesel, petrol and jet fuel or ATF, has been retained at 'nil' with effect from September 18.