Centre cuts windfall tax on petrol, diesel and aviation fuel

The Union Finance Ministry has cut the windfall tax on exports of petrol, diesel and aviation turbine fuel from Saturday, according to a gazette notification.

India first imposed the windfall tax in July 2022 to capture extraordinary gains made by oil companies as crude prices surged. The tax was scrapped two years later and reintroduced in March after oil prices rose amid the crisis in West Asia.

The special additional excise duty, through which the windfall tax is levied, has been cut on diesel exports to Rs 24 per litre from Rs 25.5.

The duty on aviation turbine fuel exports has been reduced to Rs 19.5 per litre from Rs 22, while the levy on petrol exports has been cut to zero from Rs 3.5 per litre.

The revised rates took effect on Saturday. There was no change in the existing duty rates on petrol and diesel sold for domestic consumption.

The government imposed the export duty on diesel and aviation turbine fuel on March 27 and has revised the rates every fortnight. The levy was extended to petrol exports from May 16.

The windfall tax is intended to ensure domestic availability of petroleum products and discourage exporters from benefiting excessively from differences between domestic and international prices.

The export levies are revised every fortnight based on international prices...

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