New Delhi, Sep 1 (IANS) The Centre has revised the duty structure on exports of petroleum products with effect from September 1, according to a government order, reducing both the export levy and windfall tax on diesel.
The export levy on diesel has been cut to Rs 1 per litre from the earlier Rs 3 per litre. At the same time, the windfall tax imposed on diesel exports has been reduced to Rs 19 per litre from Rs 24 per litre.
The revised duty structure comes into effect from September 1 and is expected to alter the cost structure for exporters of petroleum products.
The changes reflect the Centre’s latest adjustment to the taxation framework governing petroleum exports and could provide some relief to exporters by lowering the overall tax burden on diesel shipments from India.
The government periodically reviews the duties and windfall tax on petroleum products in line with changes in international oil prices and domestic market conditions.
Suppose the international price of a commodity suddenly rises, allowing producers or sellers to earn much higher profits than usual. The additional tax imposed by the government on such excess profits is known as a windfall tax.
The government imposes this tax on petroleum products to prevent refiners from diverting petrol, diesel or aviation turbine fuel (ATF) to overseas markets simply to earn higher profits. A higher tax makes exports less lucrative and can help maintain adequate fuel supplies in the domestic market.
The government reviews these tax rates periodically, taking into account factors such as global crude oil prices, fuel prices in international markets, export margins and domestic fuel supplies.
An increase in taxes on petrol and diesel exports raises the cost of exporting for refiners. If refiners are unable to pass the higher tax burden on to foreign buyers, their profit per litre could decline.
–IANS
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