50% export duty on molasses, reduced import duty on edible oil till March 2025, drop in windfall tax on crude oil

Starting on January 18, the export of molasses—a byproduct of sugarcane that is used as a raw material to make liquor—will be subject to a 50% levy imposed by the government. According to the Finance Ministry's announcement, molasses that comes from extracting or refining sugar will be subject to a 50% export charge. The Finance Ministry has announced an extension of the current concessional tax rates on the import of refined and crude edible oils, including palm, soybean, and sunflower, by one year, until March 31, 2025.

In June of last year, the basic import duty on refined soybean oil and sunflower oil was lowered from 17.5% to 12.5%. India imports a limited amount of light crude oil, particularly soybean, from Argentina in addition to the majority of its palm oil from Indonesia and Malaysia. Sunflower oil is imported from Ukraine and Russia.

The government has reduced windfall profit tax on domestically produced crude oil from Rs 2,300 per tonne to Rs 1,700 per tonne. The tax is levied in the form of a Special Additional Excise Duty (SAED). As per the government notification, SAED on the export of diesel, petrol and aviation fuel or ATF has been retained at zero. The new rates have become effective from January 16. India first introduced windfall profits tax on July 1, 2022, joining the list of countries that impose tax on extraordinary profits of energy companies. Tax rates are reviewed every fortnight based on the average of oil prices over two weeks.