Centre raises windfall tax on diesel and ATF exports

The Centre has increased the windfall tax on exports of diesel and aviation turbine fuel (ATF), while leaving the levy on petrol exports unchanged for the latest fortnightly review period.

According to a notification issued by the Finance Ministry, the special additional excise duty (SAED) on diesel exports has been raised to Rs 14 per litre from Rs 13.5 per litre. The duty on ATF exports has seen a steeper increase, rising to Rs 12.5 per litre from Rs 9.5 per litre.

The levy on petrol exports, however, remains unchanged at Rs 1.5 per litre.

The revised rates came into effect on Tuesday and will remain applicable until the next review.

The government has not altered duty rates on petrol and diesel sold in the domestic market, signaling that the latest changes are aimed specifically at exports rather than domestic fuel consumption.

The move follows a previous revision announced in May for the fortnight beginning 1 June, when export duties were set at Rs 1.5 per litre for petrol, Rs 13.5 per litre for diesel and Rs 9.5 per litre for ATF.

India reintroduced export duties on diesel and ATF earlier this year amid heightened geopolitical tensions in West Asia following military confrontation involving the United States, Israel and Iran. The measures were designed to ensure adequate domestic fuel availability and discourage excessive exports during a period of elevated international crude oil prices.

The windfall tax mechanism allows the government to periodically adjust levies in response to fluctuations in global energy markets and refining margins.

In April, the Centre had also increased excise duties on several petroleum products. As part of that exercise, the export duty on diesel was significantly raised, while the Road and Infrastructure Cess on diesel was increased to Rs 36 per litre under the provisions of the Finance Act, 2018.

The latest increase comes as policymakers continue to monitor developments in global crude markets, where supply concerns linked to tensions in West Asia have kept energy prices under pressure.

With IANS inputs