The Central government has announced fresh changes to the windfall tax on the exports of fuel, with the revised rates which will come into effect from July 1. The latest decision increases the export duty on petrol while lowering the levy on diesel and aviation turbine fuel (ATF). According to the Finance Ministry, the revised rates will remain in force for the fortnight beginning July 1.
New Export Duty Rates
The special additional excise duty (SAED) on petrol exports has been increased from Rs 1.5 per litre to Rs 4 per litre. On the contrary to this, the export duty on diesel has been reduced from Rs 14 per litre to Rs 8.5 per litre. The levy on ATF exports has also been lowered from Rs 12.5 per litre to Rs 7.5 per litre.
Why Was the Windfall Tax Introduced?
The government introduced the windfall tax to ensure sufficient domestic availability of petroleum products after rising tensions in West Asia pushed global crude oil prices higher. The measure was also designed to discourage excessive fuel exports and prevent refiners from earning unusually high profits during periods of elevated international prices.
Changes to Export Exemptions
Export duties on diesel and ATF were first introduced on March 27, with rates reviewed every fortnight. A similar levy on petrol exports came into effect on May 16. Initially, Public Sector Oil Companies were exempt from paying export duties on supplies sent to Nepal, Bhutan, Bangladesh and Sri Lanka.
The Finance Ministry has now extended this exemption to include exports to Mauritius and the Maldives by Public Sector Oil Companies.
No Change for Domestic Consumers
The government has clarified that these revisions apply only to fuel exports. There has been no change in the existing excise duty on petrol and diesel sold for domestic consumption, meaning the latest move does not directly affect fuel taxes paid by consumers within India.
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