Windfall tax on diesel exports cut to ₹20/litre, ATF to ₹15

The government has cut the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF) from September 16, amid rising crude oil prices and continuing tensions in West Asia.

The rate of special additional excise duty (SAED), along with road and infrastructure cess, on exports of diesel has been reduced to ₹20 per litre, from ₹25 per litre in the previous fortnight, according to a Finance Ministry notification issued on Wednesday.

The SAED on export of ATF has been cut to ₹15 per litre, from ₹19 per litre earlier.

The duty on petrol exports has been reduced to ₹0.50 per litre from ₹1.50 per litre in the previous fortnight.

The revised rates are effective from September 16, the notification said.

The government had imposed the export duty on diesel and ATF from March 27, amid escalating tensions in West Asia, and has been reviewing the levy every fortnight.

The levy on petrol exports was introduced from May 16.

The windfall tax was imposed to ensure adequate domestic availability of petroleum products and discourage refiners from diverting supplies to overseas markets to take advantage of higher international prices.

Global crude oil prices had risen following the outbreak of the conflict in West Asia, widening the price differential between domestic and overseas markets.

The government had sought to prevent exporters from making what it considered undue gains from the price difference while ensuring sufficient fuel supplies in the domestic market.

The notification also clarified that there is no change in the existing duty rates on petrol and diesel cleared for domestic consumption.

The latest reduction applies to the specified export levies and does not alter the excise duty applicable to petrol and diesel sold in the domestic market.