Talks about scrapping the windfall tax if crude prices remain below $71 are viewed as hypothetical, according to several people familiar with the development.
Sources familiar with the matter told CNBC-TV18 that policy decisions are not made in advance. Some oil companies have expressed their view that the windfall tax should be scrapped if it remains at zero for two consecutive months.
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Previously, speaking with CNBC SchedulePetroleum Secretary Pankaj Jain said regular discussions are underway with the Finance Ministry regarding the revision of windfall tax.
Jain said the recent fall in crude oil prices has prompted the government to review the need for the tax, especially as it is intended to provide relief to refining companies.
Recently, global crude oil prices have seen a significant drop. OPEC+ nations also discussed possible production increases during a recent meeting in October and November. Falling crude oil prices are beneficial for the Indian economy.
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The windfall tax, which is revised every 15 days based on international crude oil prices, was first introduced on July 1, 2022, to tax windfall profits of energy companies. The tax formula is managed by the Revenue Department and is adjusted based on fluctuations in global oil prices.
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