India Removes Road And Infra Cess On Petrol, Diesel Exports As Windfall Tax Scrapped

The Indian government has removed the road and infrastructure cess levied on petrol and diesel exports as it has scrapped the windfall tax with immediate effect.

The union government has done away with the special additional excise duty on ATF, petrol and diesel exports, according to a statement from the finance ministry on Monday. The special additional excise duty on petroleum crude production is also removed.

The windfall tax was previously at Rs 1,850 per tonne as of Sept. 17 and was brought down to Rs 0 per tonne, effective Sept. 18.

India introduced the windfall tax on crude oil in 2022, as a measure aimed to counterbalance the unusually high profits reaped by oil companies from 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. Currently, petrol and diesel are taxed under Value Added Tax rather than GST.

NDTV Profit earlier reported that the oil ministry has requested that natural gas be included in the Goods and Services Tax framework. The upcoming GST Council meeting may address the inclusion of petroleum products under GST, according to people aware of the development.

In an exclusive interview with NDTV Profit in July, Finance Minister Nirmala Sitharaman emphasised that the GST law already has provisions for including petroleum products. She noted that for this transition to occur, states must come together and reach a consensus within the GST Council.

Crude oil prices edged higher on Monday ahead of OPEC+ meeting on production later in the week. The Brent crude was trading 0.85% higher at $72.45 a barrel as of 1:27 p.m. IST, and the West Texas Intermediate was up 0.88% at $68.60.