India has increased the windfall tax on aviation turbine fuel exports to Rs 42 per litre from Rs 29.5 per litre, adding to pressure on airlines already facing higher fuel costs from a surge in global crude oil prices. The duty on diesel exports has also been raised to Rs 55.5 per litre from Rs 21.5 per litre, while petrol exports remain exempt.
The move comes as the government weighs steps to prevent higher fuel costs from feeding into airfares. Officials are reviewing tax and fee measures to protect airlines and passengers while global oil prices remain volatile.The revised rates were notified by the Finance Ministry through a gazette notification.
The windfall tax mechanism is used to curb gains made by exporters when overseas prices rise sharply above domestic levels. India remains a net exporter of ATF because of its refining capacity, making changes in export duties and domestic pricing important for both refiners and airlines.
Global crude prices have risen sharply since the outbreak of the Iran war, according to the background information provided. Supply restrictions linked to the conflict and disruption around the Strait of Hormuz have added to market pressure.
Government sources had told NDTV Profit on March 30 that the aim was to balance the interests of airlines, passengers and airport operators while limiting the effect of higher oil prices.
One of the main options under review is a reduction in value-added tax on ATF charged by states. Officials said the Civil Aviation Ministry has been in talks with other departments and may seek support from state governments.
States and Union Territories including Maharashtra and Delhi were identified as markets where higher taxes have kept ATF prices elevated, especially at metro airports.
The government is also examining whether some airport-related fees can be reduced to offset higher fuel costs. Officials plan discussions with airport operators on existing levies that could be reviewed.
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