The windfall tax on exported diesel and aviation turbine fuel (ATF) will not be applicable to Reliance Industries’ special economic zone (SEZ) refinery due to judicial rulings, a senior government official said.
According to Jainendra Singh Kandhari, joint secretary, Department of Revenue, the special additional excise duty and additional excise duty are not applicable to SEZ refineries.
Amid the ongoing conflict in West Asia between Iran and Israel, which has impacted India’s energy supply, the government announced export duties of `21.50 per litre on diesel and `29.50 per litre on ATF. However, initially it was not clear whether exports from Reliance’s special economic zone (SEZ) refinery—one of the largest contributors to India’s refined product exports—would be exempt. Reliance was exempted during the 2022 windfall tax regime.
“As per judicial prouncements on this issue, the special additional excise duty and additional excise duty are not applicable on SEZ refineries," said Kandhari.
The levy, first introduced in July 2022 following Russia’s invasion of Ukraine and withdrawn in December 2024, has been re-imposed in the form of a special additional excise duty (SAED) to encourage refiners to prioritise domestic sales over exports.
Reliance has two refineries at Jamnagar in Gujarat—a 33 million tonnes per year unit catering to the domestic market and a 35.2 million tonnes per year export-oriented SEZ unit.
Meanwhile, the government on Thursday asked oil refineries to divert some feedstock —usually used to make cooking gas (LPG) — to industries facing a petrochemical shortage. According to petroleum ministry, refineries will now supply some propylene to the petrochemical sector, which was hit after most feedstock was earlier diverted for LPG production.
Earlier, to boost LPG production, the ministry had directed refineries to use C3 and C4 hydrocarbons—such as propane, butane, propylene and butenes—only for making LPG. This stopped the supply of propylene and disrupted the plastic industry, causing shortages in food packaging and condom manufacturing. To fix this, the government has now asked refiners to supply some propylene back to the petrochemical industry.