The government on Monday announced the withdrawal of the windfall tax on Aviation Turbine Fuel (ATF), crude oil, petrol, and diesel through a notification introduced in the Lok Sabha.
The decision comes as a major relief for oil companies like Reliance Industries and ONGC, which had been bearing the burden of the tax since its imposition in July 2022. The windfall tax was initially introduced to capture a portion of the excess revenue earned by oil companies due to soaring global crude prices and higher refining margins.
The removal of the tax is expected to boost profits for these companies, particularly in refining operations.
According to the Ministry of Finance notification, the Special Additional Excise Duty (SAED)—commonly referred to as the windfall tax—on the production of petroleum crude and the export of ATF, petrol, and high-speed diesel will no longer apply.
The windfall tax, which was reviewed every 15 days based on fluctuations in global crude oil prices, had been adjusted fortnightly by the Department of Revenue to align with international oil market trends.
However, with crude oil prices stabilizing and declining in recent months, the revenue generated from the tax had significantly diminished. This prompted the government to scrap the levy, recognizing that its continuation was no longer economically viable.
(Inputs from ANI)
