Centre Slashes Windfall Tax On Fuel Exports

New Delhi: The government on Sunday halved windfall gains tax on export of petrol to Rs 1.5 litre, while reducing the levy on diesel to Rs 13.5/litre and aviation turbine fuel to Rs 9.5/litre effective June 1. However, road and infrastructure cess will be nil on export of petrol and diesel.

As per the government’s notification, there is no change in the existing duty rates on petrol and diesel cleared for domestic consumption. “The road and infrastructure cess will be nil on export of petrol and diesel. The special additional excise duty (SAED) on petrol at Rs 3/litre was imposed on May 16 and the fortnightly review slashed it to Rs 1.5/litre from June 1,” the finance ministry said in the notification.

The windfall tax was levied to increase domestic availability of the fuel amid the US-Israel and Iran war. The move of the government, however, aims at not allowing exporters to take undue advantage due to price differences as globally crude oil prices had risen since the beginning of the war.

The duty on export of diesel, the notification said, has been reduced to Rs 13.5 per litre, from Rs 16.5 per litre, and aviation turbine fuel to Rs 9.5 per litre, from Rs 16 per litre from June 1.

The government had on March 26 imposed an export duty of Rs 21.50 a litre on diesel, and Rs 29.5 a litre on ATF. In the review on April 11, the duties were hiked to Rs 55.5/litre and Rs 42/litre. In the April 30 review, they were cut to Rs 23/litre and Rs 33/litre, and further slashed to Rs 16.5/litre and Rs 16/litre on May 16.

On February 28, the US and Israel launched military strikes against Iran, triggering sweeping retaliation from Tehran. Crude oil prices have remained above $100 per barrel over the past week, from about $73 per barrel before the war.