Government Slashes Windfall Tax on Diesel and Aviation Fuel Exports

The government has reduced the windfall gains tax on diesel exports to Rs 23 per litre and aviation turbine fuel to Rs 33 per litre, aiming to disincentivize exports to ensure domestic fuel availability. This move follows an increase in global crude oil prices amid geopolitical tensions.

The government has announced a significant reduction in the windfall gains tax on diesel and aviation turbine fuel exports, effective Friday. The tax on diesel exports is now set at Rs 23 per litre, down from Rs 55.5 per litre, and aviation fuel is reduced to Rs 33 per litre from Rs 42. This decision is aimed at ensuring domestic fuel availability.

According to a statement by the finance ministry, there will be no change in the excise duty rates on petrol and diesel for domestic consumption. Additionally, the road and infrastructure cess on the export of diesel will be canceled for the next fortnight, starting May 1. The export duty on petrol remains nil.

The windfall tax was initially imposed to curb exporters from exploiting price disparities due to rising global crude oil prices, which hit a high of USD 126 per barrel amid tensions stemming from the US-Israel and Iran conflict. This measure aims to prioritize domestic fuel needs during the ongoing West Asia crises.