The Government of India will no longer impose windfall tax on crude oil, according to a gazette notification late on Tuesday.
The windfall tax—which is reviewed every fortnight—was previously at Rs 1,850 per tonne as of Sept. 17 and will now be scrapped to Rs 0 per tonne, effective Sept. 18.
The move comes amid the significant decline in crude oil prices, which have fallen over 23% in the past one year. The global benchmark price of Brent crude has plummeted, falling below the $75-per-barrel mark, a substantial decrease from its April peak of more than $92 per barrel.
The Indian government introduced a windfall tax on crude oil with effect from July 2022 as a measure aimed to counterbalance the unusually high profits reaped by oil companies as a result of escalating global crude oil prices. Since these profits arose from factors outside the companies' control, rather than improved performance or innovation, they were considered windfalls.
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