India Increases Windfall Tax on Crude Oil, Lowers Export Duty on Diesel and ATF

Unprecedented Hike in Windfall Tax

The Indian Government has announced a significant increase in the windfall tax on domestically produced crude oil. Effective from September 16, 2023, the tax has been raised from ₹6,700 per tonne to ₹10,000 per tonne. This move comes as part of the government’s bi-weekly review of various taxes and duties. Industry experts are closely watching these reviews due to their impact on the market.

Export Duty Slashed on Diesel and ATF

The government also reduced the export duty on diesel from ₹6 per litre to ₹5.5 per litre. Similarly, the duty on Aviation Turbine Fuel (ATF) has been cut from ₹4 per litre to ₹3.50 per litre. These reductions aim to make Indian exports more competitive and are expected to provide relief to various industries, including aviation.

No Changes in Export Duty on Petrol

Interestingly, the export duty on petrol remains untouched and is still at zero. This has led to speculations among industry experts as to the government’s strategy concerning petrol exports.

Previous Alterations

The government had previously made adjustments to the windfall tax on September 2, 2023, reducing it from ₹7,100 per tonne to ₹6,700 per tonne for domestically produced petroleum.

Bi-weekly Reviews

It should be noted that the government conducts a review of the windfall tax and export duties every two weeks. These regular evaluations are a significant factor that shapes the fuel industry’s landscape in India.