The Indian government has raised windfall tax on domestically produced crude oil, aviation turbine fuel, and high-speed diesel for exports. Windfall tax on crude oil has been raised to Rs 2,100 per tonne from Rs 1,700 per tonnes earlier, effective on Tuesday, according to a government order dated January 2. Export tax on diesel has been increased to Rs 7.5 per litre from Rs 5 per litre, while tax on ATF has been increased to Rs 4.5 per litre from Rs 1.5 per litre. The revised tax rate is effective from January 3, according to the order. The special additional excise duty on petrol continues to remain unchanged at ‘nil’.
Windfall tax is levied as a special additional excise duty which is aimed at absorbing the super-profits earned by domestic crude oil producers due to high global crude, product prices, and is revised every fortnight by the central government. The rates of the levies are being changed depending on crude prices and the refining spread. India, the world’s largest consumer and importer of oil, has been buying Russian crude barrels at well below a $60 price cap agreed by the West.
