Scrap windfall tax on crude, says Ficci

The government should scrap the windfall profit tax on domestically produced crude oil as the levy is impacting the capex-intensive exploration of oil and gas, the industry said in a recommendation for the forthcoming annual budget.

India first imposed windfall profit taxes on 1 July, joining a growing number of nations that tax super normal profits of energy companies. At that time, a 23,250 per tonne ($40 per barrel) windfall profit tax on domestic crude production was levied.

The new tax, which was also slapped on the export of petrol, diesel and aviation turbine fuel, is calibrated every fortnight in step with international oil prices.

Industry chamber Federation of Indian Chambers of Commerce & Industry (Ficci) in its recommendations for the budget, said such levy is in addition to all other existing levies.