The Indian government has increased the windfall tax on petrol and diesel exports while making a marginal reduction in the levy imposed on aviation turbine fuel (ATF). The revised rates came into effect on September 1 and are part of the government’s ongoing review of petroleum export duties.
Under the latest notification from the Finance Ministry, the combined Special Additional Excise Duty (SAED) and road and infrastructure cess on diesel exports has been raised to ₹25 per litre, compared with ₹24 per litre previously.
At the same time, the SAED on exported ATF has been reduced slightly to ₹19 per litre, down from ₹19.50 per litre. The government has also introduced a ₹1.50 per litre duty on petrol exports, whereas petrol exports previously carried no such levy.
Why Has the Government Revised the Windfall Tax?
The government introduced additional duties on petroleum exports amid heightened tensions in West Asia and fluctuations in global crude oil prices.
The export levies are designed to support domestic fuel availability by discouraging excessive exports when international price differences make overseas sales more attractive to refiners and exporters.
The government initially introduced the levy on diesel and ATF exports on March 27. The rates have subsequently been reviewed and revised at regular intervals. From May 16, the windfall tax framework was also extended to petrol exports.
No Change in Domestic Petrol and Diesel Duties
The latest notification does not change the existing duty rates applicable to petrol and diesel cleared for domestic consumption.
This distinction means the latest revision is specifically focused on exports rather than directly changing the existing domestic-duty structure for these fuels.
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Impact on Fuel Exporters
The higher levy on petrol and diesel exports could affect the economics of overseas fuel shipments, particularly when global crude and refined-product prices create significant differences between domestic and international markets.
Meanwhile, the small reduction in the ATF levy provides some relief to aviation-fuel exporters, although the overall impact will depend on international prices, refining margins and export volumes.
The government’s decision to continue reviewing these duties indicates that petroleum export taxation remains closely linked to global energy-market conditions and developments in West Asia.
Conclusion
India’s latest windfall tax revision increases the export duty burden on petrol and diesel while marginally lowering the levy on ATF. The changes, effective from September 1, are aimed at managing petroleum exports and supporting domestic fuel availability amid changing global market conditions.