The Reliance Jamnagar refinery, located in a special economic zone (SEZ), will be spared from duties imposed last week on export of diesel and aviation turbine fuel, the Centre has clarified on Thursday.
The government reintroduced export duties of ₹21.50 per litre on diesel and ₹29.50 per litre on aviation turbine fuel (ATF), while keeping petrol exports exempt, effective March 26. The move coincided with a ₹10 per litre cut in excise duty on petrol and diesel in an attempt to cushion public sector oil companies from soaring crude oil prices.
“According to judicial pronouncements on this issue, the special additional excise duty and additional excise duty are not applicable on SEZ refineries,” Jainendra Singh Kandhari, joint secretary in the tax research unit (TRU-1) of the department of revenue, said at a media briefing.
Initially, it was unclear if exports from Reliance’s 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.
Reliance owns and operates two refineries at Jamnagar in Gujarat — a 33 million tonne per annum (mtpa) unit catering to the domestic market and a 35.2 mtpa only-for-exports SEZ unit.
The export tax will be reviewed fortnightly to align the duty with prevailing rates, the government had clarified previously, putting the hit on the exchequer at ₹7,000 crore in a fortnight.
According to a Citi Research report, the export taxes are equivalent to $36 per barrel on diesel and $50 per barrel on ATF.
“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,” Citi had said.
“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.