The country’s large foreign exchange reserves remain sufficient to pre-empt any issues concerning repayment of external debt despite weakening of the rupee, it said.
The additional revenue will help offset the negative impact of the reduction in excise duties for petrol and diesel announced in late May to tame soaring inflation. “Significant additional tax revenue will offset fiscal pressure on the sovereign,” it said.
On July 1, the government imposed a “windfall” tax on the export of petrol, diesel and aviation turbine fuel (ATF), and a cess on domestically produced crude oil.
“The tax increase will reduce the profits of Indian crude producers and oil exporters like
Limited () and ONGC,” Moody’s said in a note on the new taxes.
Following the announcement, Indian oil companies will have to pay ₹6 per litre (around $12.2 per barrel) on exports of petrol and ATF, and ₹13 per litre (around $26.3 per barrel) on exports of diesel.