Government further reduces windfall tax on crude oil, new reforms come into effect from June 1

Windfall Tax on Crude Oil: The government has further reduced the windfall tax on petroleum crude. From June 1, the windfall tax on petroleum crude has been reduced to Rs. 5,700. 5,200 per metric ton. The government has issued a notification in this regard on May 31. The government adjusts the windfall tax every two weeks. There has been no change in the windfall tax on diesel and aviation fuel turbines. It will remain zero.

Windfall tax was also reduced earlier

Earlier on May 16, the government had reduced the windfall tax on petroleum crude from Rs. 8,400 per metric tonne to Rs. 5,700. This was earlier reduced to Rs. 9,600 from Rs. 8,400 per metric tonne.

Purpose of windfall tax

The government began imposing windfall taxes on crude oil production and gasoline, diesel and aviation fuel in July 2022. It was aimed at regulating private refining companies, which earn higher refining margins by exporting rather than selling their products in the Indian market.

India begins taxing crude oil production and exports of gasoline, diesel and aviation fuel in July 2022 to regulate private refiners who want to sell the fuels domestically to benefit from strong refining margins.