Centre cuts windfall tax on crude oil

The central government on Thursday cut the windfall profit tax on crude oil produced in the country and on exports of diesel in line with softening international oil prices.The tax, levied in the form of Special Additional Excise Duty or SAED, on domestically produced crude oil has been reduced to Rs6,300 per tonne from Rs9,800 per tonne, according to an official notification. SAED on the export of diesel was reduced to Re1 per litre from Rs2 per litre. The levy on the export of jet fuel or ATF and petrol will continue to be zero. The new tax rates came into effect from Thursday. At the last revision effective from November 1, the government had increased the tax on crude oil to Rs9,800 per tonne from Rs9,050 per tonne.

Simultaneously, the levy on the export of diesel was halved to Rs2 and that on jet fuel was brought to nil from Re1 per litre. International oil prices have softened since the last revision, necessitating the reduction.