Govt Imposes Rs 3 Per Litre Windfall Tax On Petrol Exports; Reduces Levies On Diesel; Which Countries Will Be Affected?

The government on Friday imposed a windfall gains tax of Rs 3 per litre on the export of petrol while reducing levies on diesel and aviation turbine fuel (ATF).

These revised rates, driven by elevated crude oil prices amid the ongoing West Asia conflict, will come into effect from May 16.

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Check Revised Rates

According to the notifications issued by the Finance Ministry, a special additional excise duty (SAED) of Rs 3 per litre has been imposed on the export of petrol for the first time since the start of the West Asia crisis.

At the same time, the government has reduced the levy on the export of diesel to Rs 16.5 per litre, from Rs 23 per litre, while the export duty on aviation turbine fuel (ATF) has been lowered to Rs 16 per litre from Rs 33 per litre.

The Finance Ministry further stated that the road and infrastructure cess on exports of petrol and diesel will remain nil. Additionally, there has been no change in existing excise duty rates on petrol and diesel meant for domestic consumption.

Earlier, on March 26, the government had first imposed an export duty of Rs 1.50 per litre on diesel and Rs 29.5 per litre on ATF. These levies were raised sharply on April 11 to Rs 55.5 and Rs 42 per litre, respectively, before being reduced to Rs 23 and Rs 33 per litre during the April 30 review.

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Officials stated that the windfall taxes were implemented to ensure adequate domestic fuel availability and to discourage excessive exports during disruptions caused by the conflict involving the US, Israel, and Iran.

"The windfall tax was to ensure domestic availability of petroleum products by disincentivising exports in the backdrop of the West Asia crises," PTI quoted the ministry as saying.

Which Countries Will Be Affected?

Countries that import significant volumes of petrol from India will face higher costs following the government's decision to impose a Rs 3 per litre windfall tax on export of petrol . This includes neighbouring nations such as Nepal, Bhutan, and Sri Lanka, which rely heavily on Indian fuel supplies.

(With PTI Inputs)