Windfall profit tax hiked on export of diesel, jet fuel

The government hiked the windfall profit tax on the export of diesel and on jet fuel exports with effect from September 1, according to a finance ministry notification issued late Wednesday night. The government has also raised the levy on domestically-produced crude oil amid hardening of global prices, at the fourth fortnightly review.

The windfall profit tax on the export of diesel was raised to Rs 13.5 per litre from Rs 7 per litre. The tax on Aviation Turbine Fuel (ATF) exports has been hiked to Rs 9 per litre from Rs 2 per litre. The tax on domestically-produced crude oil has been hiked to Rs 13,300 per tonne from Rs 13,000 per tonne.

The tax on exports has been raised in line with rise in margins. The levy on domestically-produced oil was hiked in consistence with changes in international oil benchmarks and expected production cut by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies.

India first imposed windfall profit taxes on July 1. The government had imposed export duties of Rs 6 per litre on petrol and ATF and a Rs 13 a litre tax on the export of diesel on July 1. Rs 23,250 per tonne windfall profit tax was levied on domestic crude production.

In the first fortnightly review on July 20, the Rs 6 a litre export duty on petrol was scrapped and the tax on the export of diesel and jet fuel (ATF) was cut by Rs 2 per litre. The tax on domestically-produced crude was slashed to Rs 17,000 per tonne.

On August 2, the export tax on diesel and ATF was cut. Levy on domestically-produced crude oil was raised to Rs 17,750 per tonne, in line with a marginal increase in international crude prices.

Subsequently, on August 19, in the third fortnightly review, the export tax on diesel was hiked to Rs 7 a litre, and Rs 2 per litre tax on ATF was restored. The levy on domestic crude oil output was cut to Rs 13,300 per tonne amid softness in international crude prices.