CURRENT AFFAIRS | 12 APRIL 2026
CLAT GK + FISCAL POLICY + TRADE LAW
The Government of India has significantly hiked export duties on diesel and aviation turbine fuel (ATF) with immediate effect, in a move aimed at dissuading refiners from exporting fuels and ensuring adequate domestic supply amid volatile global energy markets. The duty on diesel exports has been raised to Rs 55.5 per litre from Rs 21.5 per litre, while ATF export duty has been increased to Rs 42 per litre from Rs 29.5 per litre. Export duty on petrol continues to be nil.
The notifications were issued by the Central Board of Indirect Taxes and Customs (CBIC) under the Finance Ministry. These windfall taxes — in the form of export and excise duties — were first imposed from March 27, 2026, as global prices surged due to the West Asia war disrupting supply chains, particularly through the Strait of Hormuz. The government also raised the special additional excise duty on high-speed diesel and the road and infrastructure cess.
India’s total refining capacity stands at around 260 million tonnes per annum (mtpa), exceeding domestic consumption, making India a net exporter of refined fuels. Diesel and ATF are the major petroleum fuels that India exports, with significant revenues flowing from Reliance Industries (RIL) SEZ refinery and other major refiners. The hike aims to prevent exporters from taking undue advantage of the price differential between domestic and international markets.
Constitutional & Fiscal Legal Framework
- Article 265: No tax shall be levied or collected except by authority of law — the foundational provision for all taxation in India
- Article 246 + Seventh Schedule: Union List Entry 83 — Duties of customs including export duties (exclusive power of Parliament)
- Article 110: Money Bills — bills dealing with taxation can only be introduced in Lok Sabha
- Customs Act, 1962: Legal framework for levy and collection of customs duties including export duties
- Section 8A of Customs Tariff Act: Government’s emergency power to impose duties in public interest
- CBIC: Central Board of Indirect Taxes and Customs — the apex body administering customs, GST, and central excise
- Windfall Tax: A tax levied on companies earning unexpectedly large profits due to exceptional external circumstances (like war-driven price spikes)
CLAT Angle: Why This Matters for CLAT 2027
- GK Section: Exact duty figures, CBIC’s role, India’s refining capacity, and the West Asia context — expect factual questions
- Legal Reasoning: Principle-application on Article 265 — can government impose taxes without legislative approval? (Yes, through delegated legislation and emergency notifications)
- Constitutional Law: Distinction between customs duty (Union List), excise duty (concurrent from GST era), and windfall tax as a policy tool
- Economic Analysis: CLAT passages may present the trade-off between domestic supply security and free trade principles
- Key Concept: “Windfall tax” as a fiscal instrument — first introduced in India in July 2022, revived in March 2026
Key Facts at a Glance
| Fuel | Old Duty | New Duty |
| Diesel | Rs 21.5/litre | Rs 55.5/litre |
| ATF | Rs 29.5/litre | Rs 42/litre |
| Petrol | Nil | Nil (unchanged) |
| Notifying Body | CBIC (Finance Ministry) | |
| India’s Refining Capacity | ~260 mtpa | |
| Windfall Tax First Imposed | March 27, 2026 (this cycle) | |
| Key Article | Article 265 (no tax without law) | |
| Trigger | West Asia war, Strait of Hormuz disruption | |
Mnemonic: “DUTY HIKE” for Key Points
- D — Diesel duty: Rs 21.5 to Rs 55.5/litre
- U — Union List Entry 83 (customs/export duty)
- T — Tax only by authority of law (Art 265)
- Y — Year 2026, March 27 first imposition
- H — Hormuz Strait disruption triggered crisis
- I — India is net exporter of refined fuels (260 mtpa)
- K — Key body: CBIC under Finance Ministry
- E — Export duty on petrol remains nil
Practice Quiz — 10 CLAT-Style Questions
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