Windfall Tax
Mechanism and India's Experience
A windfall tax is a one-off or periodic levy on extraordinary profits earned by producers or exporters due to external events rather than business effort or investment — in this case, surging global oil prices. India introduced its windfall tax in July 2022 via Special Additional Excise Duty (SAED) on domestically produced crude oil and on exports of petrol, diesel, and aviation turbine fuel (ATF), when the Russia-Ukraine war caused global crude prices to spike. Domestic crude producers were earning international parity profits while selling to domestic refineries, generating windfall gains. The tax was reviewed fortnightly based on trailing average crude prices. India abolished the windfall tax in December 2024 when global crude prices fell.
- Introduced: July 1, 2022 — India became one of the first countries to impose this tax.
- Initial rates (July 2022): ₹23,250/tonne on domestic crude; ₹6/litre on petrol and ATF exports; ₹13/litre on diesel exports.
- Mechanism: Set fortnightly by the Finance Ministry based on prevailing 15-day average crude price; notified under the Central Excise Act.
- Abolished: December 2024 via Finance Ministry notifications (No. 29/2024 and 30/2024).
- Reinstated: March 2026 as export of refined fuel became profitable again due to elevated West Asia-driven crude prices.
● Tracked since March 27, 2026 · last seen April 11, 2026 · updates as the daily brief publishes