Modi government removes windfall tax on ATF, petrol and diesel
The Indian government has abolished the windfall tax on aviation turbine fuel (ATF), crude products, as well as diesel and petrol. The Finance Ministry has issued notifications for the same with immediate effect. The notifications terminate the Special Additional Excise Duty (SAED) on domestic crude oil production and exports of ATF, as well as Road and Infrastructure Cess (RIC) on petrol and diesel exports.
Windfall tax: A response to global crude price surge
The windfall tax was first introduced in July 2022, in response to surging global crude prices. Its main objective was to rake in revenue from the huge profits of domestic crude oil producers. The government also levied additional taxes on diesel, petrol, and ATF exports. These were implemented through the SAED and updated bi-weekly based on average oil prices over a two-week period.
Recent revisions and current status of windfall tax
The last revision of the windfall tax was on August 31 when it was set at ₹1,850 per ton for crude petroleum. Since September 18, the SAED on exports of diesel, petrol and jet fuel or ATF has remained 'nil.' The move to abolish this tax comes as crude oil prices have remained stable between $70- $75 per barrel, much lower compared to when the government first decided to impose the tax.
