India’s Petroleum Exports See Sharp Drop in April 2025
Petroleum exports from India declined drastically in April 2025 — down 12.5% by volume and 35% by value, according to latest government trade data. This sharp fall not only affects trade balances but also has important tax and GST implications for exporters, especially those claiming refunds or duty drawbacks.
Let’s simplify what this means from a tax perspective.
Key Data Highlights
- Volume decline: 12.5% YoY in April 2025
- Value plunge: 35% YoY, as per Commerce Ministry trade data
- Major buyers affected: Singapore, UAE, Netherlands
GST & Tax Implications for Petroleum Exporters
Here’s how:
Are Petroleum Products Under GST?
- Input Tax Credit (ITC) refund claims on inputs/services used for export
- Duty drawback or RoDTEP (Remission of Duties and Taxes on Exported Products)
How Exporters Are Affected
With falling export volumes and values:
- Lower export turnover affects refund eligibility under Rule 89 of CGST Rules
- Duty drawback rates (fixed or brand rate) may under-compensate actual losses
- RoDTEP rates set by DGFT may not reflect cost pressures in falling-price scenarios
Refund Challenges Faced by Exporters
Many petroleum exporters have flagged the following challenges:
| Issue | Impact |
|---|---|
| Lower invoice value | Lower ITC refund under Rule 89(4) |
| Freight costs high | RoDTEP may not offset real loss |
| Currency volatility | Affects realisation and tax refund estimates |
Legal Angle: Relevant Notifications & Rules
- ✅ RoDTEP Scheme: Notification No. 76/2021-Customs (N.T.)
- ✅ Duty Drawback Rules: Customs and Central Excise Duties Drawback Rules, 2017
- ✅ CGST Rule 89: Refund of ITC on zero-rated supplies
Expert View: Exporter Advisory
“With export values falling, it’s crucial for exporters to maintain accurate ITC records, use realistic FOB pricing, and consult professionals on duty drawback filings,” says tax advisor K. Natarajan.
Suggested Compliance Tips
- Use shipping bills as refund proof under Rule 96
- File GSTR-1 and GSTR-3B accurately for refund match
- Consider advance rulings for clarity on treatment of export-related services
Final Thoughts
India’s petroleum export slump isn’t just a trade issue — it has ripple effects on GST refunds, duty drawback claims, and working capital cycles of exporters.
If you’re an exporter facing refund delays or compliance confusion, Efiletax can help. Our team of GST and customs experts ensures accurate filings and maximum refund eligibility.
FAQ
Q1: Are all petroleum products excluded from GST?
Yes, key products like petrol, diesel, and crude are excluded. However, GST may still apply to services and inputs used for export.
Q2: Can exporters claim ITC refunds despite the fall in exports?
Yes, but refunds are proportional to export value under Rule 89. Lower values may reduce refund amounts.
Q3: What documents are needed for refund claims?
Shipping bill, GSTR-1, GSTR-3B, and foreign inward remittance proof.
Summary
India’s petroleum exports fell 35% in April 2025. Exporters must review GST refund claims, duty drawback rates, and input tax credit eligibility.