The Indian government has reduced the windfall gains tax on petrol exports to zero effective August 15, weeks after increasing the levy amid rising tensions in West Asia. Alongside this, the excise duty on diesel has been lowered by ₹1.5 per litre and on aviation turbine fuel (ATF) by ₹2.5 per litre, according to livemint.com.
The windfall tax, a special additional excise duty, was initially raised in early August to manage domestic fuel prices amid geopolitical uncertainties. The government reversed this hike after assessing market conditions and the impact on exporters and consumers. The adjustments aim to balance export incentives with domestic price stability, reflecting the government's responsive fiscal approach, livemint.com reported.
This move follows a period of volatility in global energy markets due to the ongoing conflict in West Asia, which had prompted several countries to adjust export duties and taxes. India's decision to cut the windfall tax to zero contrasts with earlier hikes and aligns with efforts to support the refining sector and maintain competitiveness in export markets. The diesel and ATF duty reductions also aim to ease costs for transportation and aviation sectors, which are sensitive to fuel price fluctuations, per livemint.com.
The government’s latest fiscal measures took effect on August 15, 2026, as detailed in official notifications and reported by livemint.com, marking a significant adjustment in India's fuel taxation policy amid global energy uncertainties.