The government of India has raised the rate of special additional excise duty (SAED) along with road and infrastructure cess on export of diesel to Rs 25 per litre from Rs 24 a litre. Further, the duty on petrol exports has been hiked to Rs 1.5 per litre, up from zero earlier. In contrast, government has reduced the SAED on export of aviation turbine fuel (ATF) to Rs 19 per litre, from Rs 19.5 per litre earlier.
The Finance Ministry has notified that the duty hikes will be effective from September 1. It has also said that there is no change in the existing duty rates on petrol and diesel cleared for domestic consumption. Amid escalating tensions in West Asia, the government has imposed an export duty on diesel and ATF on March 27 and revised the rate every fortnight. Beginning May 16, the levy was imposed on petrol exports.
The windfall tax was levied to increase domestic availability of the fuel amid the war in West Asia. It was also aimed at preventing exporters from taking undue advantage due to price differences as global crude oil prices had increased since the war began. The windfall tax was intended to ensure domestic availability of petroleum products by disincentivising exports amid the West Asia crisis.
