The windfall tax on crude petroleum has been slashed to nil from Rs 4,100 per tonne, as per a notification issued by the government on May 15. The waiver will come into effect from May 16.
Windfall tax, also referred to as the special additional excise duty (SAED), was already nil on aviation turbine fuel (ATF), petrol and diesel. The same has been left unchanged.
The decision to waive off the tax on crude petroleum as well was taken at the fortnightly review conducted by the finance ministry.
In the previous review meeting held on May 1, the government had reduced the windfall tax on crude oil to Rs 4,100 per tonne from Rs 6,400 per tonne.
Windfall wax was introduced by the government on July 1, 2022, to charge the industry for the large profit it has been earning through the sale of refined crude in the international market. Its quantum is reviewed every fortnight, on the basis of the fluctuations in the international crude rates.
When it was first imposed, export duties of Rs 6 per litre each were levied on petrol and ATF and Rs 13 a litre on diesel. The tax on crude petroleum was Rs 23,250 per tonne.
Producers, including state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta-controlled Cairn, were impacted by the windfall tax on domestic crude.
ONGC had urged the government to withdraw profit tax on domestically produced crude oil and instead use the dividend route to tap into the bumper earnings resulting from a surge in global energy prices, news agency PTI had reported earlier.
However, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri had said in December that the windfall tax was under the purview of the Finance Ministry and the ministry would continue to review it at every fortnight.