India has scrapped a windfall tax on crude products, aviation turbine fuel, and petrol and diesel exports, a government order said on Monday.

Reuters had reported on Thursday, citing a federal government source, that India’s finance ministry was evaluating the relevance of the tax.

Imposed in July 2022, the windfall tax was a special levy on domestic crude oil production that was introduced after a rise in global crude prices, to capture revenue from windfall gains made by producers.

It also applied to some products refined from crude, including aviation turbine fuel, and petrol and diesel exports.

Tarun Kapoor, an adviser to the Indian prime minister, said in October the finance ministry would evaluate scrapping the windfall tax on domestic crude output as a decline in global oil prices meant there was little justification for maintaining it.

The Indian government collected 130 billion rupees through the windfall tax in 2023-24, compared to 250 billion rupees a year ago, according to a government source.

In the financial year thus far, the government has collected 60 billion rupees through the tax, the source said. The government does not release a breakdown of windfall tax collections.
Source: Reuters (Reporting by Nikunj Ohri and Mayank Bhardwaj; Editing by YP Rajesh, Jan Harvey and Bernadette Baum)