📷 Image Credits: The Hindu
India has recently made adjustments to the windfall profit taxes imposed on energy companies, specifically on domestically-produced crude oil. Effective June 15, the government has reduced the windfall tax from ₹5,200 per tonne to ₹3,250 per tonne.
This tax, known as the Special Additional Excise Duty (SAED), applies to domestically-produced crude oil, while the SAED on exports of diesel, petrol, and jet fuel remains at zero. The recent rate revision is part of India’s ongoing efforts to regulate the energy sector.
The introduction of windfall profit taxes in July 2022 marked India’s entry into a group of nations that tax supernormal profits earned by energy companies. These tax rates are subject to review every fortnight, based on the average oil prices over the preceding two weeks.
The reduction in windfall tax aims to strike a balance between regulating private refiners and supporting the domestic oil market. By adjusting the tax rates, India seeks to prevent the exploitation of robust refining margins by private refiners who may choose to sell fuel overseas rather than domestically.
Overall, this move by the government is expected to have significant implications for the energy sector in India, impacting both producers and consumers alike.
