Finmin to review efficacy of windfall tax on crude oil and fuel exports

The Finance Ministry would review the efficacy of windfall tax on the export of petrol, diesel and Aviation Turbine Fuel (ATF) as global crude oil prices have stabilised, sources said. 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.

The finance ministry is going to review the windfall tax and tax being mobilised out of this, sources said.

The Ministry of Petroleum and Natural Gas has already written to the Finance Ministry in this regard, sources 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 (SAED) and is notified fortnightly based on average oil prices in two weeks.

The last such revision 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.

India first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies.

Sources also said the Ministry of Petroleum and Natural Gas has written a letter to the Finance Ministry to consider bringing natural gas under the Goods and Services Tax (GST) ambit.

It is for the GST Council headed by the Union Finance Minister to consider the proposal and take a call on this, sources added.