The union government on Friday (August 30) reduced windfall tax on domestically produced crude oil to ₹1,850 per tonne from ₹2,100 per tonne. The tax is levied in the form of a Special Additional Excise Duty (SAED).
The SAED on the export of petrol, diesel and jet fuel or ATF has been retained at nil. The new rates become effective on August 31 2024, an official notification said.
A windfall tax is levied on domestic crude oil if the rates of the global benchmark rise above $75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) rise above $20 per barrel. Product cracks or margins are the difference between crude oil (raw material) and finished petroleum products.
India first imposed windfall tax on July 1, 2022. At that time, export duties of ₹6 per litre ($12 per barrel) each were levied on petrol and ATF and ₹13 a litre ($26 a barrel) on diesel. The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.