Govt cuts windfall gains on petrol to zero; diesel, ATF duties also reduced

The government has cut windfall gains tax on exports of petrol, for the fortnight beginning August 15, while the special additional excise duty (SAED) has been reduced for the same time period.

The rate of SAED on the export of diesel is now ₹24 per litre, down from ₹25.5 a litre. SAED on exports of ATF is set at ₹19.5/litre, as against ₹22/litre earlier, news agency PTI reported.

The duty on petrol exports has been cut to nil effective August 15, from ₹3.5 per litre levied on August 3.

The revised duty will be effective from August 15, the finance ministry said in a notification quoted by PTI.

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The ministry noted that there is no change in the existing duty rates on petrol and diesel cleared for domestic consumption.

The government had imposed an export duty on diesel and ATF on March 27 and revised the rate every fortnight after the Iran-US war disrupted fuel supplies. The war brough the crucial Strait of Hormuz, a key energy passage, in the line of fire as US and Iran traded strikes for weeks.

On May 16, the finance ministry hiked the export duty on petrol to ₹3 per litre from nil while reducing the export duty on diesel and aviation turbine fuel to ₹16.5 and ₹16 per litre, respectively.

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The government had imposed the windfall tax to increase domestic availability of the fuel amid the war in West Asia.

It was also aimed at preventing exporters from taking undue advantage due to price differences, as global crude oil prices had risen since the war began.

The windfall tax was intended to ensure domestic availability of petroleum products by disincentivising exports amid the West Asia crisis.

The petrol price as on August 15 in Delhi is ₹102.12/litre, ₹113.76/litre in Kolkata, ₹111.38/litre in Mumbai and 107.87/litre, according to goodreturns.com.