The Centre on Friday cut excise duty on fuel and withdrew tax rebate and duty exemption benefits on exports of petrol, high-speed diesel and aviation turbine fuel, amending the Central Excise Rules, 2017, with immediate effect.Union Finance Minister Nirmala Sitharaman announced that in view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by Rs 10 per litre each.The move will provide protection to consumers from the rise in prices.“PM Modi has always ensured that citizens are protected from vagaries of supply and costs of essential goods. Further, duties have been imposed on exports of diesel at Rs 21.50 per litre and on ATF at Rs 29.50 per litre. This will ensure adequate availability of these products for domestic consumption. Parliament has been notified,” she said.The move, notified by the Ministry of Finance’s Department of Revenue, effectively closes two key provisions that exporters of these fuels had long used to either claim refunds on excise duty paid or to lift goods without paying duty before export.The change in the country’s excise tax rules will directly affect the export of petrol, diesel and aviation turbine fuel from India.The notification has been amended to say that exporters of these three fuels will no longer be entitled to claim tax rebates and duty-free export benefits that were previously available to them.The amendment inserts a specific exclusion clause into Rule 18 and Rule 19 of the Central Excise Rules, 2017, barring motor spirit commonly known as petrol, high-speed diesel oil and aviation turbine fuel from the benefits available under both provisions. The notification was issued under the powers vested in the Centre under Section 37 of the Central Excise Act, 1944.The government has carved out a specific exemption for public sector oil companies exporting these three fuels to Nepal, Bhutan, Bangladesh and Sri Lanka. State-owned oil companies supplying fuel to these four neighbouring countries will continue to operate under the earlier tax regime and will not be hit by the withdrawal of benefits.The exemption signals New Delhi’s intent to protect its strategic fuel supply arrangements with immediate neighbours even as it tightens the overall export tax framework for petroleum products.The rules have come into force with immediate effect, leaving no transition window for affected exporters to adjust their operations or financial planning. The notification has been signed by Dheeraj Sharma, Under-Secretary in the Tax Research Unit of the Department of Revenue.The government has offered no official explanation accompanying the notification for the rationale behind the sudden withdrawal of export benefits. However, the move is widely seen as an effort to discourage fuel exports by private players at a time when the government is keen to ensure domestic availability and prevent any misuse of export promotion incentives on strategically sensitive commodities.