Centre imposes import duty on gold, cess on petro product exports to raise revenue

Sandeep Dikshit

New Delhi, July 1

The Centre has imposed additional import duty on gold, a cess of Rs 23,250 per tonne on crude and extra duties on the export of refined petroleum products such as petrol, diesel and Aviation Turbine Fuel.

While the duty on gold has been increased from 10.75 per cent to 15 per cent to help curtail the Current Account Deficit, the government said there will be no impact of the cess on crude and other extra duties on the prices at the pump.

The notification was issued late on Thursday night. There was no word yet on how much revenue the government expects to garner from these moves.

A cess of Rs 23,250 per tonne by way of special additional excise duty has been imposed on crude so that the Central Exchequer could take a slice of the windfall gains being made by the domestic crude producers due to the sharp rise in crude prices.

The domestic crude producers sell to domestic refineries at international parity prices.

Import of crude would not be subject to this cess which will have no adverse impact on domestic petroleum products/fuel prices, stated an official news release.

Small producers, whose annual production of crude in the preceding financial year is less than 2 million barrels, will be exempt from this cess.

No cess will be imposed on crude that is produced in excess of last year’s production in order to incentivise additional production over the preceding year.

Special additional excise duty has been imposed on exports of petrol and diesel at the rate of Rs 6 per litre on Petrol and Rs 13 per litre on diesel.

While crude prices have increased sharply in recent months, the prices of HSD and Petrol have shown a sharper increase. The refiners export these products at globally prevailing prices, which are very high.

As exports are becoming highly remunerative, it has been seen that certain refiners are “drying out their pumps’’ in the domestic market. In view of this, cess has been imposed on the exports of petrol and HSD.

This step too, will have no implication on domestic retail prices of HSD and Petrol. At the same time, exporters have to declare at the time of exports that half of the quantity mentioned in the shipping bill will be supplied in the domestic market.

A special additional excise duty of Rs 6 per litre has been imposed on exports of Aviation Turbine Fuel for the same reason.