The Centre has reduced the windfall tax levied in the form of Special Additional Excise Duty (SAED) on domestically produced crude to Rs 5,700 per tonne from Rs 8,400 per tonne with effect from Thursday.
As per the notification, the windfall tax, however, remains unchanged at nil for diesel and aviation fuel turbines.
On May 1, the government had reduced the windfall tax to Rs 8,400 a tonne from Rs 9,600.
Windfall tax is reviewed every fortnight on the basis of oil prices and fuel margins in the international market.
An increase in windfall tax comes against the prospects of upstream oil companies such as Oil and Natural Gas Corp and Oil India. The government levies windfall tax when an industry earns large profits unexpectedly.
The government had first imposed windfall tax in July 2022 to tax the profits of crude oil producers when the crude oil prices went high globally on the back of Russia-Ukraine conflict.