Finance ministry evaluating removal of windfall tax, government source says

Imposed in July 2022, the windfall tax is a special levy on domestic crude oil production, introduced after rising global crude prices, to capture revenue from windfall gains made by producers

Finance ministry is evaluating the relevance of windfall tax, a government source said on Thursday (November 28, 2024).

Imposed in July 2022, the windfall tax is a special levy on domestic crude oil production, introduced after rising global crude prices, to capture revenue from windfall gains made by producers.

In addition to the crude oil levy, the government also imposed special taxes on exports of diesel, petrol, and aviation turbine fuel.

By the end of August, the windfall tax on domestically produced crude oil was reduced to ₹1,850 per tonne, eventually dropping to zero effective from September 18. The windfall tax on export of diesel and aviation turbine fuel was also eliminated.

The finance ministry is now looking at the collections from windfall tax and studying the crude price trend before taking a call on scrapping the levy, the source said.

The finance ministry will evaluate scrapping windfall tax on domestic crude oil output, Tarun Kapoor, adviser to the Prime Minister, said last month.

The officials said after decline in global crude oil prices, there was little justification for maintaining the tax.

Published - November 28, 2024 01:12 pm IST