Government Raises Taxes On Diesel, Aviation Fuel Export

The government raised taxes on aviation turbine fuel exports to 9 rupees per litre from 2 rupees per litre, a government notification said on Thursday.

The government also hiked the windfall tax for domestically produced crude oil from 13,000 rupees per tonne to 13,300 rupees per tonne, according to the notification.

In the fourth fortnightly review since the imposition of windfall taxes on July 1, the government raised the windfall profit tax on the export of diesel to Rs 13.5 per litre from Rs 7 per litre. The tax on Aviation Turbine Fuel (ATF) exports has also been hiked to Rs 9 from Rs 2 per litre, effective September 1.

The tax on exports has been raised as margins rose, while the levy on domestically-produced oil was increased marginally on slight changes in international oil prices and expectations of a price rise in hopes of a production cut by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies.

In the previous fortnightly review, the export duty tax on ATF was reintroduced. The export duty on ATF was scrapped in the second fortnightly review at the start of August.

The levy on domestic crude oil output was cut to Rs 13,300 per tonne from Rs 17,750 per tonne in the third review, in line with the softening of crude prices.