The Ministry of Finance on September 2nd 2024 amended an older notification related to exemption of the excisable goods. It includes amendments to the Central Excise duties that will impact the export of certain petroleum products.
Key Amendments:
The new notification makes specific adjustments to the previous notification No. 10/2022-Central Excise, which was originally published on June 30, 2022. The key changes are as follows:
1.Revised Duty Structure for Exported Motor Spirit and High-Speed Diesel Oil
The central change in the notification involves the duty structure for motor spirit (commonly known as petrol) and high-speed diesel oil when these products are exported.
Motor Spirit (Petrol):
Previous Regulation: Under the old notification, the duty structure for motor spirit when cleared for export was categorized under different regulations based on the destination country.
New Amendment: The updated notification specifies that the duty on motor spirit (petrol) exported to countries other than Bhutan remains unchanged. However, for exports specifically to Bhutan, the duty has been revised to ‘Nil per litre’. This means that exporting petrol to Bhutan will now be exempt from Central Excise duty.
High-Speed Diesel Oil:
Previous Regulation: Similar to motor spirit, high-speed diesel oil had different duty structures based on the destination country.
New Amendment: The duty on high-speed diesel oil exported to countries other than Bhutan will continue under the previous regulations. For exports to Bhutan, however, the duty has also been revised to ‘Nil per litre’. This exemption indicates that there will be no Central Excise duty on diesel oil exported to Bhutan.
2.Omission of Paragraph 2
The notification also omits Paragraph 2 from the previous notification. This paragraph likely contained provisions that are now considered redundant or have been replaced by the new amendments. The exact details of Paragraph 2’s content and its implications are not specified in the new notification, but its removal streamlines the regulations.
Implications of the Changes
The revised duty structure has several potential implications:
- For Exporters: Exporters of petrol and diesel oil to Bhutan will benefit from the zero-duty provision, which could make their products more competitive in the Bhutanese market. This change might encourage more trade with Bhutan by reducing the overall cost of export.
- For Revenue Collection: By removing the Central Excise duty for exports to Bhutan, the government might be aiming to foster better trade relations and enhance bilateral economic activities. However, it’s essential to consider how this might affect overall revenue collection from the excise duties.
- For Policy Adjustments: This amendment reflects a targeted approach to trade policy, focusing on specific countries and products. It may indicate a strategic move to strengthen economic ties with Bhutan and encourage exports in these sectors.
Effective Date
These changes will come into effect on September 3, 2024.
Stakeholders involved in the export of these petroleum products should prepare for the transition and ensure that their compliance measures align with the updated regulations.
Conclusion
The recent amendments to the Central Excise duties represent a notable shift in the regulatory landscape for the export of motor spirit and high-speed diesel oil. By exempting these products from excise duties when exported to Bhutan, the government aims to boost trade and enhance bilateral relations. Exporters should review these changes carefully and adjust their strategies accordingly to leverage the new duty structure.
