Introduction: The Indian Government has made a significant alteration to the Excise Duty on Petroleum Crude. Through Notification No. 26/2023-Central Excise, dated 14th August 2023, the windfall tax on crude petroleum has been raised, along with the introduction of a new duty on jet fuel. This comes as part of an ongoing review by the government and marks a notable change in the country’s energy taxation policy.
Analysis:
1. Increased Windfall Tax on Crude Petroleum: The windfall tax has been increased from Rs 4,250 to Rs 7,100 per tonne. This is the second hike within the month, and it will come into effect from August 15.
2. New Duty on Jet Fuel (ATF): A duty of Rs 2 per litre will now be imposed on jet fuel, where previously there was no Special Additional Excise Duty (SAED).
3. Government’s Reviewing Strategy: The government’s decision to review the windfall tax fortnightly highlights its active monitoring of the sector and possibly indicates a reaction to current global economic conditions.
4. Legal Framework: The amendment comes under section 5A of the Central Excise Act, 1944 read with section 147 of the Finance Act, 2002, emphasizing the government’s legal authority to make these changes.
Conclusion: The latest amendment to No. 18/2022-Central Excise, marking an increase in the windfall tax on crude petroleum and the imposition of a new duty on jet fuel, underscores the Indian Government’s dynamic approach to managing the fiscal aspects of the energy sector. These changes could have wide-ranging impacts on the industry, possibly affecting prices and availability. Stakeholders within the petroleum sector should review the amendments carefully and make necessary adjustments to align with the new regulatory landscape.
Ministry of Finance
(Department of Revenue)
New Delhi
Notification No. 26/2023-Central Excise | Dated: 14th August, 2023
G.S.R. 600(E).—In exercise of the powers conferred by section 5A of the Central Excise Act, 1944 (1 of 1944) read with section 147 of the Finance Act, 2002 (20 of 2002), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), notification No. 18/2022-Central Excise, dated the 19th July, 2022 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 584 (E), dated the 19th July, 2022, namely:-
In the said notification, in the Table,-
(i) against S. No. 1, for the entry in column (4), the entry “Rs. 7,100 per tonne” shall be substituted;
(ii) against S. No. 2, for the entry in column (4), the entry “Rs. 2 per litre” shall be substituted
2. This notification shall come into force on the 15th day of August, 2023.
[F. No. 354/15/2022-TRU]
AMREETA TITUS, Dy. Secy.
Note : The principal notification No. 18/2022-Central Excise, dated the 19th July, 2022 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 584 (E), dated the 19th July, 2022, and was last amended vide notification No. 24/2023-Central Excise, dated the 31st July, 2023, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 572(E), dated the 31st
