In a recent move, the Indian government has announced significant changes to its tax policies related to the petroleum industry. These changes include an increase in the special additional excise duty (SAED) on domestically produced crude petroleum, as well as reductions in levies on diesel and Aviation Turbine Fuel (ATF). Here are the key details:
1. Windfall Tax on Domestic Crude Oil
Effective from September 30, 2023, the government has raised the windfall tax on domestically produced crude oil to Rs 12,100 per tonne. This marks an increase from the previous rate of Rs 10,000 per tonne, which was set during the last fortnightly review on September 15, 2023. The windfall tax is intended to capture excessive profits in the crude petroleum sector.
2. Reduction in Diesel Duty
As part of these changes, the government has decided to reduce the SAED on the export of diesel. The duty on diesel will be lowered to Rs 5 per litre, down from the previous rate of Rs 5.50 per litre. This adjustment aims to make diesel more affordable for consumers and businesses.
3. Decrease in Aviation Turbine Fuel (ATF) Duty
In a move that will benefit the aviation industry, the SAED on Aviation Turbine Fuel (ATF) is set to decrease. Effective from the upcoming Saturday, the duty on ATF will be reduced to Rs 2.5 per litre, down from the previous rate of Rs 3.5 per litre. This reduction is expected to lower operational costs for airlines.
4. No Change in Petrol SAED
It’s important to note that the SAED on petrol will remain unchanged, with no additional duty imposed on petrol.