Govt. imposes new taxes on export of petrol, diesel and aviation fuel

To bring ease to the domestic fuel supply crunch, Government of India has decided to impose an export tax on petrol, diesel and jet fuel (ATF) shipped overseas. The Government has also imposed a windfall tax on crude oil produced domestically by companies.

Following are the details of the Notifications issued regarding Customs duties on 30th June 2022. The details are as follows:

A cess of Rs 23,250 per tonne (by way of special additional excise duty-SAED) has been imposed on crude.
Crude prices have risen sharply in recent months. The domestic crude producers sell crude to domestic refineries at international parity prices. As a result, the domestic crude producers are making windfall gains. Taking this into account, a cess of Rs. 23250 per tonne has been imposed on crude. Import of crude would not be subject to this cess.

Crude is sold by domestic producer at international parity price. This cess will have no adverse impact, whatsoever, on domestic petroleum products/fuel prices. Further, small producers, whose annual production of crude in the preceding financial year is less than 2
million barrels will be exempt from this cess.

Also, to incentivise an additional production over preceding year, no cess will be imposed on such quantity of crude that is produced in excess of last year production by a crude producer. As stated above, this measure would not impact crude prices or the prices of petroleum products and fuels.

Special additional excise duty/Cesses has been imposed on exports of petrol and diesel at the rate of Rs.6 per litre on Petrol and Rs.13 per litre on diesel. While crude prices have increased sharply in recent months, the prices of HSD and Petrol have shown a sharper increase. The refiners export these products at globally prevailing prices, which are very high. As exports are becoming highly remunerative, it has been seen that certain refiners are drying out their pumps in the domestic market.

In view of this, cesses equal to Rs 6 per litre on Petrol and Rs 13 per litre on diesel have been imposed on their exports. These cesses would apply to any export of diesel and Petrol from the country.

As the above measure has been applied to exports, it has no implication on domestic retail prices of HSD and Petrol. At the same time, EXPORT POLICY condition has been imposed by the DGFT that the exporters would be required to declare at the time of exports that 50% of the quantity mentioned in the shipping bill has been/will be supplied in the domestic market during the current FY. These measures would not have any adverse impact on domestic retail prices of diesel and petrol. Thus, domestic retail prices would remain unchanged. At the same time these measures will ensure domestic availability of the petroleum products.

A special additional excise duty (SAED) of Rs 6 per litre has been imposed on exports of Aviation Turbine Fuel. Like HSD and Petrol, the international prices of ATF have risen sharply. Accordingly, on the same reasoning, as stated above for diesel and petrol, a cess of Rs 6 per litre has been imposed on exports of ATF. This measure will not have any adverse impact on domestic prices of aviation.


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