In a recent announcement, the Indian government has introduced substantial alterations to its taxation policies within the petroleum industry. These modifications involve an uptick in the special additional excise duty (SAED) imposed on domestically produced crude oil, accompanied by reductions in levies on diesel and Aviation Turbine Fuel (ATF). Here is an overview of the essential details:
Effective from September 30, 2023, the government has increased the windfall tax on domestically produced crude oil to Rs 12,100 per tonne. This represents a rise from the previous rate of Rs 10,000 per tonne, which had been established during the last fortnightly review on September 15, 2023. The windfall tax aims to capture excessive profits in the crude petroleum sector.
As part of these changes, the government has opted to decrease the SAED on diesel exports. The duty on diesel will now stand at Rs 5 per litre, down from the previous rate of Rs 5.50 per litre. This adjustment is geared toward enhancing affordability for consumers and businesses.
In a move that is set to benefit the aviation industry, the SAED on Aviation Turbine Fuel (ATF) will be reduced. Effective from the upcoming Saturday, the duty on ATF will drop to Rs 2.5 per litre, down from the prior rate of Rs 3.5 per litre. This reduction is expected to alleviate operational costs for airlines.
It’s worth noting that the SAED on petrol will remain unchanged, with no additional duty imposed on petrol.