New Delhi, April 2 The reimposed windfall export taxes on diesel and aviation turbine fuel (ATF) will not apply to Reliance Industries Ltd's SEZ refinery due to court rulings, a senior official said on Thursday.
Effective from March 26, the government revised fuel levies, reintroducing export duties of ₹21.50 per litre on diesel and ₹29.50 per litre on ATF, while keeping petrol exports exempt. This move coincided with a ₹10 per litre cut in excise duty on petrol and diesel.
Initially, it was unclear whether exports from Reliance's special economic zone (SEZ) refinery—one of the largest contributors to India's refined product exports—would retain exemptions similar to those under the 2022 windfall tax regime.
"According to court pronouncements on this issue, the special additional excise duty and additional excise duty are not applicable to SEZ refineries," Jainendra Singh Kandhari, Joint Secretary in the Tax Research Unit (TRU-1) of the Department of Revenue, said at a media briefing.
The government reinstated the windfall export tax amid disruptions to global energy supplies caused by the Middle East conflict. The levy, first introduced in July 2022 following Russia's invasion of Ukraine and withdrawn in December 2024, has been reimposed in the form of a special additional excise duty (SAED) to encourage refiners to prioritize domestic sales over exports.
Reliance owns and operates two refineries at Jamnagar in Gujarat—a 33 million tonnes per year unit catering to the domestic market and a 35.2 million tonnes only-for-exports SEZ unit.
The export tax will be reviewed fortnightly—as was the practice previously—to align the duty with prevailing rates.
According to a Citi Research report, the export taxes are equivalent to USD 36 per barrel on diesel and USD 50 per barrel on jet fuel.
"In FY25, 75 per cent of Reliance's diesel production and 35 per cent of its jet fuel production were from its SEZ refinery, which we believe, based on 2022 precedent, could be exempt from this tax.
"If we therefore assume the export tax is applicable only on the non-SEZ volumes, the impact should be largely offset by still-elevated diesel/jet fuel cracks vs pre-conflict levels," it had said in the report last week.
The government, on March 26, announced the first material reduction in domestic petroleum excise duty since April 2022, offering relief to oil marketing companies (OMCs) that had been incurring huge losses after being unable to raise retail prices of petrol and diesel despite a sharp surge in crude oil costs.
In a separate note, Jefferies said the reimposed export duty broadly caps diesel/ATF spreads at USD 20 per barrel for standalone refiners like Reliance. "This is similar to the level of margin caps introduced during the Russia-Ukraine conflict in 2022. However, this time the movement in crude premiums and freight rates has been very stiff, making capturing spreads challenging for global refiners."
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