India cuts windfall taxes on fuel exports as global prices fall

The Centre has reduced windfall tax and exports levy after the oil prices have softened in the international market. The decision was taken after a review on Monday, officials said.

The Centre reduced the windfall tax on domestically produced crude to Rs 17,000 a tonne and also cut levy on exports on diesel by Rs 2 and aviation-fuel exports would be cut by 2 rupees a litre.

It also exempted special additional excise duty levied on exports, when done from the special economic zone.

Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods, when exported from units located in the Special Economic Zone (SEZ)," a notification said.

The move will offer relief for top fuel exporters like Reliance Industries and state-run Oil & Natural Gas Corp.

On July 1, the government imposed windfall gain taxes on the export of petrol, diesel and aviation turbine fuel (ATF), and on the domestic production of crude oil. It has also mandated exporters to meet the requirements of the domestic market first.

Following the government's announcement, Indian oil companies were to pay Rs 6 per litre (around $12.2 per barrel) on exports of petrol and ATF, and Rs 13 per litre (around $26.3 per barrel) on exports of diesel. At the same time, upstream producers will have to pay taxes of Rs 23,250 per tonne (around $38.2 per barrel) of crude oil produced in India.

The centre had already announced that it will review the windfall tax every 15 days.