Centre extends excise duty exemption to petrol blended with up to 30% ethanol, no immediate rollout
New Delhi, June 11
The Centre has extended central excise duty exemptions to petrol blended with 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol, according to notifications issued by the Ministry of Finance's Department of Revenue in the Gazette of India.
Under the notifications, eligible fuel blends conforming to Bureau of Indian Standards (BIS) specifications will attract a nil rate of central excise duty.
However, it has been clarified by the ministry that the move is a preliminary requirement for enabling higher ethanol blends and does not indicate their immediate rollout. Any introduction of higher ethanol blends will take place only after extensive testing and consultations.
Blending ethanol with petrol at the depot level is treated as a manufacturing activity and had already been exempted from excise duty up to E20. Following the availability of BIS standards for higher blends, the excise duty exemption has now been extended to E22, E25, E27 and E30 blends as well.
The notifications specify the composition requirements for each blend to qualify for the exemption.
The Gazette stated: "22% ethanol blended petrol that is a blend, - (a) consisting, by volume, of 78% motor spirit, (commonly known as petrol), on which the appropriate duties of excise have been paid and of 22% ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case may be, have been paid; and (b) conforming to the Bureau of Indian Standards specification IS 19850."
The notification also stated that, "30% ethanol blended petrol that is a blend, - (a) consisting, by volume, of 70% motor spirit, (commonly known as petrol), on which the appropriate duties of excise have been paid and of 30% ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case may be, have been paid; and (b) conforming to the Bureau of Indian Standards specification IS 19850."
According to the notifications, "appropriate duties of excise" include duties levied under the Fourth Schedule to the Central Excise Act, 1944, the additional duty of excise under Section 112 of the Finance Act, 2018, and the special additional excise duty under Section 147 of the Finance Act, 2002.
The definition also includes the Agriculture Infrastructure and Development Cess levied under Section 125 of the Finance Act, 2021.
— ANI
Reader Comments
Finally some clarity! But why only extend the exemption when we don't have infrastructure for higher blends yet? The government should first ensure that petrol pumps across India are equipped for E20 and above before making these announcements. Rural areas still struggle with basic fuel quality issues. Also, what about the water consumption for ethanol production? We're facing water scarcity in many states. 💧🌾
Good step towards energy security. But I wish the government would also focus on electric vehicles and hydrogen fuels. Ethanol blending alone won't solve our pollution issues. And please, ensure that the ethanol used is from sustainable sources like agricultural waste, not food grains. We can't afford another food price spike like we saw with pulses last year! 🌱⚡
As someone working in the biofuel sector, I can say this is a logical step. India's ethanol blending program has been quite successful so far - we went from 1.5% to 10% in just a few years. The BIS standards for higher blends are crucial for vehicle compatibility. However, the "no immediate rollout" caveat means we still need more testing, especially in older Indian cars. Patience is needed! 🛢️🔬
This is good news for farmers in Maharashtra and UP who grow sugarcane. But what about other feedstocks? Why can't we use broken rice or maize for ethanol? The government should diversify the feedstock base to avoid regional monopolies. Also, I hope the excise duty savings are passed on to consumers - we're paying enough at the pump already! 🤑⛽
E Emma D