The central government has removed the Special Additional Excise Duty (SAED), also known as windfall tax, on Aviation Turbine Fuel (ATF), petrol, and diesel. This means that refining companies exporting petrol and diesel will no longer be required to pay the windfall tax. Additionally, the government has also removed the windfall tax on crude products. Finance Minister Nirmala Sitharaman presented this information in a notification in the Lok Sabha on Monday.
Three months ago, the government had reduced the windfall tax on domestic crude oil exports. The tax was reduced from Rs 2,100 per metric ton to Rs 1,850 per metric ton, effective from August 31. The government reviews the windfall tax every 15 days.
Earlier, on August 16, the government reduced the windfall tax from Rs 4,600 per metric ton to Rs 2,100 per metric ton, a reduction of 59.78% in August. Additionally, the government decided to keep the export duty on diesel, petrol, and ATF at zero.
This means that domestic refining companies will continue to benefit from the exemption on the export of diesel, petrol, and ATF, which will help them.
Windfall taxes are adjusted based on changes in Brent crude prices. The central government first imposed the windfall tax on July 1, 2022. Currently, many countries tax the large profits of energy companies.
The windfall tax is applied when oil companies make significant profits due to special circumstances. After the Russia-Ukraine war in February 2022, the prices of crude oil surged, leading to huge profits for oil companies. As a result, the government imposed the windfall tax on these companies.
Shashi Rai
