NEW DELHI (Reuters) – India’s finance ministry is evaluating the relevance of windfall tax, a federal government source said on Thursday.
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 Indian rupees ($21.90)per tonne, eventually dropping to zero effective from Sept. 18. The windfall tax on export of diesel and aviation turbine fuel was also eliminated.
The federal 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 federal finance ministry will evaluate scrapping windfall tax on domestic crude oil output, Tarun Kapoor, adviser to the Indian prime minister, said last month.
The officials said after decline in global crude oil prices, there was little justification for maintaining the tax.
($1 = 84.4800 Indian rupees)
(Reporting by Nikunj Ohri, Writing by Manoj Kumar; Editing by Jacqueline Wong and Stephen Coates)
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