Big Changes From May 1: Windfall Tax On Diesel Cut To Rs 23, Export Duty Lowered To Rs 33 For Jet Fuel

In major good news, the government has revised the windfall tax for the fortnight starting from May 1, 2026. Despite the geopolitical conditions being fragile, the government has decided to lower the windfall tax or export duty on diesel and jet fuels. The export duty remains NIL on petrol.

Windfall Tax From May 1:

In its latest notification dated, April 30, the Finance Ministry said, the rates for the next fortnight beginning 1st May, 2026 have been notified by the central government.

Accordingly, the rate of duty on exports of diesel will be Rs 23 per litre with effect from May 1, compared to previous rate of Rs 55.5 per litre. Further, the export duty is reduced to Rs 33 per litre on aviation turbine fuel (ATF) from earlier Rs 42 per litre.

On the other hand, the windfall tax on petrol continues to be zero.

Due to the geopolitical crisis in Middle East after US-Israel-Iran started war, the Indian government had to bring back export levies [Special Additional Excise Duty (SAED)/Road and Infrastructure Cess (RIC)] on the exports of petrol, diesel and aviation turbine fuel (ATF) on March 27, 2026.

The move was announced to ensure domestic availability of petroleum products by disincentivising exports in the backdrop of the West Asia crises.

Since then the rates are being revised on a fortnightly basis and the last such revision was undertaken with effect from 11th April 2026.

The rates are prescribed based on the average international prices of crude oil, petrol, diesel and ATF prevailing during the period since the last review.

What Is Windfall Tax?

Windfall taxes are imposed on companies and industries during unprecedented times such as geopolitical crisis, pandemics, wars, or supply shortages. These are applied to companies who are expected to reap gains from external circumstances.

Hence, the main agenda of a windfall tax is to seize unanticipated gains of a business or sector to offer fair distribution of profits in society. Also, a windfall tax boosts the government's revenue book.

It needs to be noted that windfall tax is applied to addition of the standard tax rate.