The government cut windfall tax on petrol, diesel and ATF exports from September 16, lowering duties amid continuing West Asia tensions and fuel-market concerns.
The government slashed the windfall gains tax on exports of petrol, diesel and aviation turbine fuel (ATF) for the fortnight starting September 16. For diesel exports, the special additional excise duty (SAED), including the road and infrastructure cess, has been reduced to Rs 20 per litre from Rs 25. The SAED on ATF exports has also been cut to Rs 15 per litre from Rs19. Meanwhile, duty on petrol exports has been slashed to Rs 0.5 per litre effective September 16, from Rs 1.5 per litre in the previous fortnight.
The Finance ministry in a notification said the duty hikes will be effective from September 16. Amid escalating tensions in West Asia, the Government imposed an export duty on diesel and ATF on March 27 and revised the rate every fortnight.
Beginning May 16, the levy was imposed on petrol exports. The ministry also said that there is no change in the existing duty rates on petrol and diesel cleared for domestic consumption.
Notably, the windfall tax was levied to increase domestic availability of the fuel amid the war in West Asia. It was also aimed at preventing exporters from taking undue advantage due to price differences as global crude oil prices had risen since the war began. The windfall tax was intended to ensure domestic availability of petroleum products by disincentivising exports amid the West Asia crises.
What does This Mean?
After the move, the tax burdern on exports for oil companies will come down, improving their profitability. The reducing of the windafll tax can provide greater flexibility to exporters when global oil prices are volatile amid the ongoing Middle East conflict.
The cut in export duties will have no impact on domestic petrol and diesel prices.