India hikes windfall tax on diesel, ATF exports; petrol duty slashed to zero

India's finance ministry announced a fresh round of changes to windfall tax rates on petroleum product exports, widening the tax burden on diesel and ATF while providing relief to petrol exporters. The modifications, which come into effect from October 31, mark the latest adjustment in the government's effort to manage export duties on energy commodities.

The special additional excise duty on diesel exports, combined with road and infrastructure cess, will increase to ₹11.5 per litre from ₹8.5 per litre. For aviation turbine fuel, the export tax has been marginally raised to ₹11 per litre from ₹10.5 per litre. In contrast, the government has completely removed the ₹2.5 per litre export duty on petrol for the fortnight beginning October 31.

The windfall tax framework on petroleum exports was first introduced on March 27 following heightened geopolitical tensions in West Asia. Since then, the government has revised rates every fortnight to reflect prevailing market conditions and domestic energy needs. The levy on petrol exports was added to the framework beginning May 16.

The finance ministry clarified that these changes apply exclusively to export duties and do not affect tax rates on petrol and diesel cleared for domestic consumption. The domestic fuel market remains insulated from the recent policy adjustments, ensuring stable pricing for consumers within India.