Finance Ministry announced the amendment on Thursday unexpected tax on energy companies as crude oil prices have cooled globally.
According to a government notification issued on Thursday, the windfall tax on crude oil production has been revised to Rs 4,900 per tonne with effect from December 2 from the existing Rs 10,200 per tonne.
In a fortnightly revision of windfall profit tax, the government reduced the rate on export of diesel from Rs 10.5 per liter to Rs 8 per litre. This levy includes Rs 1.5 per liter road infrastructure cess.
The special additional excise duty on petrol is nil and Rs 5 per liter on aviation fuel ATF.
India imposed a windfall profits tax for the first time on July 1, joining the list of nations that tax the super ordinary profits of energy companies. But international oil prices have cooled since then, reducing profit margins for both oil producers and refiners.
When the levy was first introduced, a windfall tax was imposed on exports of petrol along with diesel and ATF (aviation turbine fuel). But in the subsequent fortnightly review, the tax on petrol was removed.
While the windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on the crack, or margin, that refiners earn on overseas shipments. These margins are mainly the difference between international oil price and cost.
At that time, an export duty of Rs 6 per liter ($12 per barrel) was imposed on petrol and ATF and Rs 13 per liter ($26 per barrel) on diesel. A windfall profit tax of 23,250 rupees per tonne ($40 per barrel) was also imposed on domestic crude oil production.
Read also: Revenue Secretary says economy is bouncing back, tax compliance has been much better in last two years
Read also: Why is India buying crude oil from Russia?
with inputs from agencies