Reliance SEZ Refinery Exempt from New Windfall Tax on Fuel Exports
No windfall tax on diesel, ATF exports from Reliance SEZ refinery
Business Standard
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The Indian government has reimposed windfall export taxes on diesel and aviation turbine fuel (ATF), but Reliance Industries Ltd's special economic zone (SEZ) refinery will remain exempt due to judicial rulings. This decision aligns with efforts to prioritize domestic sales amid global energy supply disruptions.
- 01Reliance's SEZ refinery is exempt from new windfall export taxes on diesel and ATF.
- 02The government has reintroduced export duties of ₹21.50 per litre on diesel and ₹29.50 per litre on ATF.
- 03The export tax will be reviewed every two weeks to align with market conditions.
- 04Reliance's SEZ refinery accounts for 75% of its diesel and 35% of its jet fuel production.
- 05The reimposition of taxes aims to encourage domestic sales over exports amidst global supply issues.
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The Indian government has reinstated windfall export taxes on diesel and aviation turbine fuel (ATF), imposing duties of ₹21.50 per litre for diesel and ₹29.50 per litre for ATF effective March 26. However, Reliance Industries Ltd's special economic zone (SEZ) refinery will not be subject to these taxes due to judicial rulings, as confirmed by Jainendra Singh Kandhari, Joint Secretary in the Tax Research Unit of the Department of Revenue. This SEZ refinery is a significant contributor to India's refined product exports, producing 75% of Reliance's diesel and 35% of its jet fuel. The government aims to prioritize domestic sales amid ongoing global energy supply disruptions caused by the conflict in West Asia. The export tax will be reviewed every two weeks to adjust to market conditions. Analysts note that the export taxes are equivalent to about USD 36 per barrel for diesel and USD 50 per barrel for jet fuel, which may limit profit margins for standalone refiners like Reliance.
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The exemption for Reliance's SEZ refinery from windfall taxes may help maintain stable fuel prices for consumers, as it allows the company to prioritize exports without additional tax burdens.
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