According to a government order, the central government has slashed the windfall profits tax imposed earlier this month on crude oil by about 27% to Rs 17,000 per tonne. The tax was previously levied as a special additional excise tax of Rs 23,250 per tonne.
The government has also cut the export duty on aviation turbine fuel to Rs 4 per litre from Rs 6 per litre in a separate order. In addition, the export duty of Rs 5 per litre of petrol has been removed as special additional excise duty. This export duty has been reduced for diesel from Rs 12 per litre to Rs 10.
In addition, the additional excise duty per Rs 1 levied on petrol and diesel exports has also been removed. Hence, the petrol export tax of Rs 6 per litre has been removed. In the case of diesel, the total reduction in export duty is now Rs 3 per litre, bringing the current applicable rate to Rs 10.
The move is part of a realigned tax commitment under the global oil price review.
The windfall profits tax was introduced under an order issued on June 30 to eliminate some of the excess profits oil producers have made from high oil prices in global markets. Since then, global oil prices have fallen.
Shares in major oil producers such as ONGC and Reliance Industries rose more than 5% and 3% in early trade on the news.
Tax Minister Tarun Bajaj said the tax would be reviewed every 15 days after it was introduced on July 1, taking into account factors such as foreign exchange rates and global crude oil prices.