Govt Increases Windfall Tax on Crude Oil

Through a notification dated September 29, 2023, the Ministry of Finance increased the windfall tax on domestic crude oil from Rs. 10,000 to Rs.12,100 per tonne. Further, tax on the export of diesel and Aviation Turbine Fuel (ATF) has been reduced to Rs.5 per litre and Rs.2.5 per litre, respectively. The revised tax rates have come into force w.e.f. September 30, 2023.

In 2022, there was a surge in crude oil prices on account of the Russia-Ukraine war, and Indian oil companies generated huge revenue. Consequently, on July 1, 2022, a windfall tax was imposed on the sale of domestic crude. Such taxes are expected to lower the prices for consumers. The tax rates are reviewed every fortnight considering the fluctuations in crude oil prices. The last time the tax rates on crude petroleum and export of ATF were revised was on September 15, 2023.[1]

[1] https://taxinformation.cbic.gov.in/view-pdf/1009858/ENG/Notifications