Government cuts windfall tax on crude oil to ₹ 4,100 per tonne

Centre has slashed the windfall tax on crude oil to ₹ 4,100 per tonne from ₹ 6,400 per tonne. As per a government notification, this will be effective from 2nd May 2023.

However, government has left the windfall tax on petrol, diesel and aviation turbine fuel at zero. Earlier, on April 4, tax on petroleum crude was cut to zero from ₹ 3,500 per tonne. On 19th April, India hiked the levy on crude to ₹ 6,400 per tonne.

The tax rates are revised forthnightly based on the oil prices that fluctuate. Windfall tax is a higher tax levied by the government on specific industries when they experience unexpected and above-average profits.

India levied the windfall tax for the fist time on 1st July last year, joining a large number of nations that tax super normal profits of energy companies. As per Economic Times, 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.