On 26 March 2026, the Ministry of Finance notified the Central Excise (Amendment) Rules, 2026, revising the scope of export incentives under the Central Excise Rules, 2017 and safeguarding strategic and diplomatic exports undertaken by Public Sector Oil Companies (PSUs).
Key Points of Central Excise (Amendment) Rules:
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Effective from 26 March 2026, these Rules amend the Central Excise Rules, 2017.
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The amendment introduces proviso to Rule 18, providing that the said Rule will not apply to motor spirit (commonly known as petrol), high-speed diesel oil, and aviation turbine fuel (ATF). However, a limited exception has been carved out for exports undertaken by Public Sector Oil Companies to Nepal, Bhutan, Bangladesh, and Sri Lanka.
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A similar proviso has been inserted in Rule 19, extending the same exclusion and exception to exports made under bond or letter of undertaking.
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Rule 18 of the Central Excise Rules deals with rebate of duty paid on excisable goods or inputs used in the manufacture of exported goods, while Rule 19 permits export of excisable goods without payment of duty subject to execution of bond or letter of undertaking.
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By insertion of these provisos, the Government effectively withdraws both export facilitation mechanisms for the specified petroleum products, except where exports are undertaken by designated Public Sector Oil Companies to specified neighbouring countries.
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Accordingly, export of petrol, high-speed diesel, and ATF under rebate or bond is restricted for private entities, while Public Sector Oil Companies can continue to avail such benefits, but strictly to specified neighbouring countries.
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The amendment establishes a clear classification:
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Allowed: Exports by Public Sector Oil Companies to Nepal, Bhutan, Bangladesh, and Sri Lanka
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Disallowed: All other exports of petrol, high-speed diesel, and aviation turbine fuel under Rule 18 or Rule 19
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This Amendment marks a decisive policy shift in the treatment of petroleum product exports under the Central Excise Rules.
