Govt cuts windfall gains tax on petrol, diesel, ATF exports
ADVERTISEMENT
The government has cut windfall gains tax on exports of petrol, diesel and ATF for the fortnight beginning August 15.
The rate of special additional excise duty (SAED) on the export of diesel is now ₹24 per litre, down from ₹25.5 a litre. SAED on exports of ATF is set at ₹19.5/litre, as against ₹22/litre earlier.
The duty on petrol exports has been cut to nil effective August 15, from ₹3.5 per litre levied on August 3.
The finance ministry, in a notification, said the duty hikes will be effective from August 15.
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.
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 crisis.
Why the government is cutting the levy now
The latest reduction comes less than two weeks after the government sharply raised export levies on petrol, diesel and ATF on August 3. The duty on diesel exports was increased to ₹25.5 per litre from ₹15.5, while the levy on ATF was raised to ₹22 from ₹14.5. Petrol export duty was also increased to ₹3.5 per litre from ₹2.5.
The government reviews these levies every fortnight, allowing it to respond to changes in international crude oil and refined fuel prices. The latest move partly reverses the August 3 increases, with the petrol export levy now being removed entirely.
The export levy was reintroduced in March amid the escalation of the West Asia conflict and the resulting rise in global oil prices. It was intended to discourage refiners from sending more fuel overseas when international prices were more attractive, and help maintain supplies in the domestic market.