Government has reduced the windfall profit tax imposed on the export of petrol, diesel and ATF (jet fuel). This change will come into effect from June 1. However, there has been no change in the tax rates on domestically consumed fuel. According to a notification issued by the Finance Ministry, the Special Additional Excise Duty (SAED) on the export of petrol has been reduced from Rs 3 per liter to Rs 1.5 per liter. Similarly, the tax imposed on export of diesel has been reduced from Rs 16.5 per liter to Rs 13.5 per liter.
Now tax of Rs 9.5 will be collected on ATF instead of Rs 16.
Apart from petrol and diesel, the government has reduced the tax on ATF, a fuel used in airplanes, from Rs 16 per liter to Rs 9.5 per litre. These new tax rates will be applicable from June 1. The Ministry has also clarified that the Road and Infrastructure Cess applicable on domestic use of petrol and diesel will remain nil and no change has been made in it. The government has made several changes to the windfall profits tax regime in recent months as per the need. This step has been taken keeping in mind the fluctuations in international crude oil prices and geopolitical circumstances.
Why is the government fluctuating so much in the windfall profit tax?
Let us tell you that since the conflict between America, Israel and Iran started at the end of February this year, there has been a sharp increase in the prices of crude oil. Due to disruption in the supply of crude oil through the Strait of Hormuz, its access to the domestic market has also been affected. Earlier, heavy duties were imposed on the export of petroleum products, which have been reduced after review from time to time. This is done to increase the availability of fuel in the domestic market. The ministry said that this tax regime was implemented with the aim of ensuring adequate availability of fuel in the domestic market and to prevent unfair advantage of the difference in global prices.
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