Centre hikes windfall tax on diesel, ATF exports
New Delhi, June 16
The government has raised windfall gains tax on diesel and aviation turbine fuel exports, while keeping the levy on petrol unchanged for the fortnight starting Tuesday.
According to a notification issued by the Finance Ministry, the special additional excise duty (SAED) on diesel exports has been increased to Rs 14 per litre from Rs 13.5 per litre.
In addition, the duty on ATF exports has been raised more sharply to Rs 12.5 per litre from Rs 9.5 per litre.
However, there is no change in the SAED on petrol exports, which will continue at Rs 1.5 per litre. The revised rates will come into effect from today.
Moreover, the government has kept unchanged the existing duty rates on petrol and diesel meant for domestic consumption.
Earlier in May, the government had revised export levies on petrol, diesel and aviation turbine fuel (ATF) for the fortnight beginning June 1.
At that time, the duty was fixed at Rs 1.5 per litre on petrol, Rs 13.5 per litre on diesel and Rs 9.5 per litre on ATF exports.
In March, the export duty on diesel and ATF was imposed amid escalating tensions in West Asia following the US-Israel attack on Iran and subsequent retaliation.
The windfall tax was introduced to improve domestic availability of petroleum products and discourage exports at a time of elevated global crude prices driven by the West Asia conflict.
In April, the Centre increased excise duties on petroleum products, including high-speed diesel. The export duty on diesel was raised by Rs 34 per litre to Rs 55.5 per litre from Rs 21.5 per litre.
In a separate notification, the government had increased the Road and Infrastructure Cess on diesel to Rs 36 per litre under provisions of the Finance Act, 2018.
— IANS
Reader Comments
I understand the need to secure domestic supply, but raising taxes on exports seems like a short-term fix. Global crude prices are volatile, and this might hurt our refining companies' competitiveness in the long run. We need a more strategic approach to energy security.
Arre yaar, every time there's a crisis in the Middle East, we Indians end up paying more for fuel! This tax might stop exports, but what about our daily commute? Petrol is Rs 100+ per litre in many cities. The govt should also reduce excise duty on domestic fuel. Common man is suffering! 😡
Smart move by the Finance Ministry. With the West Asia situation still tense, this will ensure we don't face a fuel shortage like some other countries. The hike on ATF might increase airfares a bit, but security of supply is more important. Plus, the tax revenue can be used for infrastructure!
I'm confused. They increased duty on diesel exports by only 50 paise, but on ATF by Rs 3. So airlines will suffer more? My family's travel plans might get affected. Also, why is petrol export duty still only Rs 1.5? Seems inconsistent. Need more transparency in these decisions.
As an economist, I see this as a necessary evil. The windfall tax helps capture some of the extraordinary profits oil companies make during global crises. But Rs 14 on diesel and Rs 12.5 on ATF seems steep. It might lead to reduced refining margins and eventually lower production. Hope the govt monitors this carefully.