Finance Ministry has on December 2 scrapped the windfall tax on aviation turbine fuel (ATF), crude products, diesel and petrol products.
"Notification nos 29/2024 and 30/2024 dated 2.12.2024 issued with immediate effect for withdrawal of windfall tax i.e special additional excise duty (SAED) levied on production of crude and export of ATF, SAED and Road and Infrastructure Cess (RIC) on export of petrol and diesel. Notification laid in the parliament," said Finance Ministry.
Imposed in July 2022, the windfall tax is a special levy on domestic crude oil production, introduced after rising global crude prices, to capture revenue from windfall gains made by producers.
In addition to the crude oil levy, the government also imposed special taxes on exports of diesel, petrol, and aviation turbine fuel.
The tax was 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.
The decision to scrap windfall fall tax comes as crude oil prices have been trading in the range of $70- $75 per barrel, significantly lower compared to when the government decided to levy the tax, amid demand worries from China, the largest oil importer in the world, fading tensions in the Middle East and possibly of oversupply in the oil market.
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