The Centre has reduced windfall tax rates on exports of diesel, petrol and aviation turbine fuel (ATF).
The revised rates have come into effect from Saturday, while domestic excise duties remain unchanged.
Highlights
- Windfall tax on diesel exports cut to ₹24 per litre from ₹25.5 per litre.
- Export duty on ATF reduced by ₹2.5 per litre to ₹19.5 per litre.
- Duty on petrol exports brought down to zero from ₹3.5 per litre.
- No change in existing excise duty on petrol and diesel sold for domestic consumption.
- Government reviews windfall tax rates every fortnight.
- Rates are reviewed based on international crude oil and petroleum product prices.
The central government has reduced the windfall gains tax imposed on exports of diesel, petrol and aviation turbine fuel (ATF), providing relief to fuel exporters. The revised rates have come into effect from Saturday, according to a notification issued by the Finance Ministry.
Under the latest revision, the windfall tax on diesel exports has been reduced to ₹24 per litre from ₹25.5 per litre earlier. This represents a reduction of ₹1.5 per litre.
The duty imposed on exports of aviation turbine fuel has also been lowered. The government has cut the ATF export duty by ₹2.5 per litre, bringing the new rate down to ₹19.5 per litre.
Petrol exporters have received a bigger relief, with the export duty being reduced to nil from ₹3.5 per litre. This means petrol exports will no longer attract the windfall tax under the latest revision.
However, the government clarified that the changes are limited to exports. There has been no change in the existing excise duty rates applicable to petrol and diesel cleared for domestic consumption.
The windfall tax mechanism is used by the government to respond to changes in international energy markets and the extraordinary profits that energy companies may earn when global oil and fuel prices rise sharply.
The government had initially imposed export duties on diesel and ATF to discourage excessive exports and ensure adequate availability of petroleum products in the domestic market. The measure was introduced against the backdrop of the West Asia conflict and a sharp increase in global energy prices.
The Centre reviews these tax rates every fortnight, taking into account international crude oil prices as well as the prices of petroleum products. Petrol exports were subsequently brought under the windfall tax framework from May 16.
The latest reduction indicates an adjustment in the tax burden in line with changing conditions in international energy markets.
