Govt hikes windfall tax on crude oil and diesel

Govt hikes windfall tax: The government has decided to increase the windfall tax on domestically produced crude oil from Rs 3,200 per tonne to Rs 3,300 per tonne, effective from Friday. This tax, administered in the form of a Special Additional Excise Duty (SAED), is part of ongoing efforts to ensure fair taxation in the energy sector.

Simultaneously, the SAED on exported diesel has been revised upwards to Rs 1.50 per liter, marking a departure from the previous nil rate. Notably, no changes have been made to the levies on petrol and aviation turbine fuel (ATF), keeping them at nil.

The adjusted tax rates will come into effect on February 16, impacting the financial dynamics of crude oil and diesel transactions. It's essential to highlight that these windfall profit taxes were initially introduced on July 1, 2022, aligning India with global practices aimed at curbing supernormal profits in the energy sector. 

The government reviews these tax rates every fortnight, based on the average oil prices observed in the preceding two weeks, ensuring a dynamic and responsive approach to market conditions.