The Modi government on Thursday reduced the windfall tax on crude oil from Rs 9,800 per tonne to Rs 6,300 per tonne. Not only this, the central government has reduced the unexpected tax on diesel from Rs 2 per liter to Rs 1. The tax imposed on domestic crude oil production in the form of Special Additional Excise Duty or SAED has been increased from Rs 9,050 per tonne to Rs 9,800 per tonne.
As per the official notification on October 31, these rates will be applicable from November 1. The government has reduced the SAED on diesel exports from Rs 4 per liter to Rs 2 per litre.
India first imposed the windfall tax on July 1 last year, joining a growing number of countries taxing windfall profits of energy companies.
At that time, an export duty of 6 rupees per liter (US$12 per barrel) was imposed on petrol and ATF and 13 rupees per liter (US$26 per barrel) on diesel.
Tax rates are reviewed every fortnight based on average oil prices over the last two weeks. A windfall tax is imposed on domestic crude if the global benchmark rate rises above US$75 per barrel. If the production margin rises above US$20 per barrel, there is a levy on exports of diesel, ATF and petrol.