The special additional excise duty (SAED) of Rs 6 per litre slapped on jet fuel exports to protect domestic availability has boomeranged on Indian airlines and put their overseas operations at a cost-disadvantage against foreign carriers.Industry sources said some of the oil companies have taken the view that Friday’s export tax notification has upended the exemption from 11% basic excise duty (BED) on jet fuel purchased by domestic carriers for their overseas flights as the part of the fuel will be consumed before entering international airspace. This has led to Indian carriers being burdened with SAED and BED, jacking up the cost of their overseas operations, whereas foreign airlines remain exempted from both taxes under the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002. EY India partner Saurabh Agarwal pins the situation on different interpretation of the term ‘export’ for the purpose of SAED and BED. “Jet fuel supplied to foreign-going aircraft is considered as an ‘export’ in terms of the SAED notification, leading to exemption being withdrawn for the international operations of Indian carriers,” he said. “However, the same term ‘export’, when used in the context of BED notification, is leading to levy of BED on fuel being used for international operations of an Indian carrier as part of the ATF is being consumed by the Indian carriers before the flight crosses 200 nautical miles from the Indian baseline.” Agarwal said the foreign aircraft Act of 2002 provides an overriding effect, no duty and taxes can be levied on aircraft registered in foreign countries that are either signatories to the Chicago Convention Treaty or have entered into Air Services Agreements with India. So the foreign carriers remain exempted from the taxes, while fuel procured by Indian carriers become costlier for international operations. The Centre on Friday also imposed SAED of Rs 6 per litre, or roughly 7 cents, on petrol and Rs 13, or about 16 cents, on diesel after petrol pumps of state-run retailers ran dry in several states because of a rush created by private refiner-retailers Reliance Industries and Nayara curtailing domestic sales amid an unprecedented surge in demand and preferring to export. The Centre also levied SAED of Rs 23,250 per tonne, or roughly $40 per barrel, on producers pumping more than 2 million tonnes of crude a year to mop up part of their windfall gains accruing from elevated oil prices due to the conflict in Ukraine.