New Delhi: The government on Friday reduced the windfall gains tax applicable on fuel exports, lowering the duty on diesel shipments to Rs 23 per litre and on Aviation Turbine Fuel (ATF) to Rs 33 per litre. In a statement, the Finance Ministry said there will be no change in the current excise duty rates on petrol and diesel sold for domestic use.
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The special additional excise duty on diesel exports has been brought down from Rs 55.5 per litre to Rs 23 per litre, while the levy on ATF exports has been revised from Rs 42 per litre to Rs 33 per litre.
As part of the revision, the road and infrastructure cess on diesel exports has been set at nil for a period of two weeks starting May 1. The ministry also clarified that export duty on petrol will continue to remain at zero.
The reduction follows a sharp increase in export duties over the past month. On March 26, the government had introduced an export duty of Rs 21.50 per litre on diesel and Rs 29.5 per litre on ATF. This was subsequently raised on April 11, when the levy on diesel exports was increased to Rs 55.5 per litre and that on ATF to Rs 42 per litre.
The windfall tax had been imposed to boost availability of fuel within the domestic market during a period of global supply disruptions caused by the US-Israel and Iran conflict.
It was also aimed at preventing exporters from benefiting excessively from the differential between domestic and international fuel prices, as crude oil prices surged following the escalation in West Asia.
Tensions escalated after February 28, when the United States and Israel launched strikes against Iran, prompting retaliatory actions from Tehran. In the aftermath, global crude oil prices rose sharply to around USD 126 per barrel, compared with roughly USD 73 per barrel prior to the conflict.
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According to the ministry, the windfall tax was intended to ensure adequate domestic supply of petroleum products by discouraging exports during the ongoing West Asia crisis.
