Govt should scrap windfall profit tax on domestic crude oil: FICCI

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

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. At that time, a Rs 23,250 per tonne (USD 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 ATF, is calibrated every fortnight in step with international oil prices.

Industry chamber FICCI in its recommendations for the Budget, said such levy is in addition to all other existing levies.

"It is recommended that the Special Additional Excise Duty (SAED) on petroleum crude should be removed or if there is a need to continue the levy for some time as an extraordinary measure then the rate be changed to an ad-valo