This is the second time since the tax was imposed that it has been zeroed. The last time the Centre had zeroed it was on April 4, 2023.
Windfall Profit Tax in India
India has imposed a windfall tax on crude oil producers from July 2022 and also raised taxes on exports of gasoline, diesel and aviation fuel, as private refiners look to sell fuel abroad to benefit from stronger refining margins rather than selling locally.
The Central Government on August 31 reduced the windfall tax on domestically produced crude oil from Rs 2,100 per tonne to Rs 1,850 per tonne.
Earlier, the government had on August 17 revised the windfall profit tax on petroleum products, reducing the tax rate on domestic crude oil to Rs 2,100 per tonne from Rs 2,400 per tonne.
The Indian government reviews the windfall profits tax every fortnight, and this cut comes following a significant drop in crude oil prices.
Prices of global benchmark Brent crude have fallen from $92 a barrel in April to below $75 a barrel.
Windfall taxes are levied by the government when an industry makes unexpectedly large profits, mainly due to some unprecedented event.