On Friday, the government increased the import duty on gold, slapped an export tax on petrol, diesel, and jet fuel (ATF) shipped out by firms like Reliance and Nayara Energy, and simultaneously imposed a windfall tax on crude oil. While the gold move will cause the prices to go up, the higher export duty on diesel and jet fuel seeks to boost domestic supply. The cess on domestic crude production is a tax on windfall gain. A hike in duty on petro-products or cess on domestic crude will not push prices in the domestic market. The government also maintained that it will review the new taxation on crude and petro-products every fortnight based on international prices and take a call accordingly.

A notification by the Finance Ministry stated the basic customs duty will now be 12.5 percent as against 7.5 percent. Though a surcharge at the rate of 10 percent of basic customs duty has been removed, the 2.5 percent agriculture infrastructure development cess (AIDC) will remain. Effectively, import duty will now be 15 percent as against 10.75 percent, and the new rates are effective from Friday. According to FM, Sitharaman, India does not produce much gold. The production is almost nil. So, we are importing by paying foreign exchange. So, we would want to see whether we can try to discourage the extent to which people are importing. According to a note from the Finance Ministry, there has been a sudden swell in gold imports. In May, a total of 107 tonnes of gold was imported and in June, too, the imports have been noteworthy. The surge is putting pressure on the current account deficit (CAD) with the resultant impact being the weakening of the rupee. Special additional excise duty/cess has been imposed on the export of petrol at ₹6 per litre and diesel at ₹13 per litre. This is at a time when refineries are largely choosing to export, resulting in limited supplies at domestic retail outlets. The action seeks to boost domestic supplies. The government has also imposed special additional excise duty of ₹6 per litre on exports of Aviation Turbine Fuel (ATF). According to Sitharaman though it is a good thing that India has become a refining hub and the government would like that to continue, it is also true that some private pump outlets are now not supplying for domestic consumption. Further, she said India buys crude from different places in cost-effective ways while also making sure the excise duty is cut so that the burden is not passed on to the ordinary citizen. Despite all these steps being taken, oil is not available and is being exported. Now, it is good that it is being exported, but it is also true that it is being exported with phenomenal profits.

According to her, earning profits is good but these are extraordinary times. We need that at least some of it is for our citizens and that is why we have taken this twin-pronged approach. It is not to discourage exports. It is not to discourage India from remaining a refining hub. It is certainly not against profit earnings. But extraordinary times do require such steps. According to revenue Secretary Tarun Bajaj, the increase in the duty will be applied to SEZs as well, but the export restriction will not be applicable. A cess of ₹23,250 per tonne has been imposed on crude. The Finance Ministry stated that crude prices have risen sharply in recent months. it told that the domestic crude producers sell crude to domestic refineries at international parity prices. As a result, the producers are making windfall gains. Taking this into account, a cess has been imposed. The import of crude would be subject to this cess.