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Finance ministry weighs removing windfall tax amid falling crude prices: Report
The Finance Ministry is assessing the potential removal of the windfall tax and monitoring the trend of crude oil prices before making a decision, according to a Reuters report.
Business Today was unable to verify the development independently.
Introduced in July 2022, the windfall tax was a special levy on domestic crude oil production, aimed at capturing revenue from the unexpected profits of producers due to soaring global oil prices. In addition to the crude oil levy, the government imposed special taxes on the export of diesel, petrol, and aviation turbine fuel.
By the end of August, the windfall tax on domestically produced crude oil was reduced to Rs 1,850 ($21.90) per tonne and was eventually eliminated on September 18. Taxes on the export of diesel and aviation turbine fuel were also removed.
India first introduced windfall profit taxes on July 1, 2022, following the global trend of taxing extraordinary profits in the energy sector. The tax rates are reviewed every two weeks, based on the average oil prices of the previous fortnight.
The finance ministry will evaluate scrapping windfall tax on domestic crude oil output, Tarun Kapoor, adviser to the Indian prime minister, said last month. Officials said after decline in global crude oil prices, there was little justification for maintaining the tax.
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