Budget 2016: FM sets oil cess at 20% ad valorem, hikes ATF excise duty to 14%

Shweta Mungremoneycontrol.comThe Finance Minister Arun Jaitley on Monday reduced the cess on domestically produced crude oil from Rs 4500 per metric tonne to 20 percent ad valorem, as he presented the Union Budget for 2016-17. The move follows repeated requests by the domestic industry to align the cess to international crude oil prices. The FM also announced hike in excise duty on aviation turbine fuel to 14 percent from 8 percent. Although this was not expected, the fact that excise duty on petrol and diesel, mostly used by the common man, was much higher than ATF, hinted at the possibility of such a hike.As international oil prices slumped to 12-year lows, the domestic industry was widely anticipating re-imposition of 5-percent customs duty on crude oil imports.  

In June 2011, when rates zoomed to over USD 100 per barrel, the customs duty on crude oil imports had been cut to zero from 5 percent.