Windfall profit tax on crude oil cut; levy on diesel, ATF exports hiked

Govt cuts windfall profit tax on domestic crude oil, hikes levy on diesel, ATF exports. SAED on crude oil reduced to ₹6,700/tonne, diesel exports to ₹6/litre, ATF to ₹4/litre. Tax rates reviewed every fortnight based on avg oil prices. Windfall tax on crude oil if rates >$75/barrel, export duties if product cracks >$20/barrel. Int'l crude oil avg $86.43/barrel in Aug, levy on diesel, ATF brought back in Aug. Reliance, Nayara Energy primary fuel exporters in India.

The government has cut the windfall profit tax on crude oil produced in the country while the levy on exports of diesel and aviation turbine fuel (ATF) has been hiked, an official notification said.

The tax, levied in the form of special additional excise duty or SAED, on domestically produced crude oil was reduced to ₹6,700 per tonne from ₹7,100 a tonne.

SAED on the export of diesel was increased to ₹6 per litre from ₹5.50 a litre and on jet fuel or ATF to ₹4 per litre from ₹2, the notification said.

SAED on export of petrol will continue to be zero.

The new tax rates came into effect from Saturday, the order dated September 1, said.

India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax supernormal profits of energy companies. At that time, export duties of ₹6 per litre ($12 per barrel) each were levied on petrol and ATF and ₹13 a litre ($26 a barrel) on diesel.

A ₹23,250 per tonne ($40 per barrel) windfall profit tax on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) was also levied.