Govt exempts 22% to 30% ethanol blended petrol from central excise duty
New Delhi, June 11
The government has extended central excise duty exemptions to petrol blended with 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol. There will be a nil excise duty rate for fuel blends that conform to BIS standards.
This decision comes through official notifications issued by the Ministry of Finance under the Department of Revenue in the latest issue of The Gazette of India.
The statutory definition for each blend follows a precise composition rule to qualify for the nil duty rate.
"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 Gazette stated.
The exact same structural parameters apply to the remaining higher percentage fuel mixtures. The Gazette clarifies the volume requirements for the maximum blend level included in this fiscal measure.
"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," it stated.
The explanation section in the notifications states that appropriate duties of excise mean the duties of excise as leviable under the Fourth Schedule to the Central Excise Act, 1944, the additional duty of excise leviable under section 112 of the Finance Act, 2018, and the special additional excise duty leviable under section 147 of the Finance Act, 2002.
It also encompasses the Agriculture Infrastructure and Development Cess leviable under section 125 of the Finance Act, 2021.
— ANI
Reader Comments
As someone who works in the auto sector, I'm cautiously optimistic. Higher ethanol blends can affect engine performance in older vehicles. The government should release clear guidelines for consumers and mechanics. Also, hope this doesn't lead to food vs fuel debate in the long run.
Interesting policy from India's perspective. In Australia, we've had similar incentives for biofuels but the infrastructure rollout was slow. Hope India's oil marketing companies (OMCs) can scale up ethanol blending capacity quickly enough to meet the 30% target without supply disruptions.
Good initiative but the real question is about implementation. Our ethanol production capacity is still below target. The government should focus on 2G ethanol from agricultural waste rather than just using foodgrains. That would be a win-win for environment and rural economy! 🌾
I appreciate the environmental intent but I'm concerned about the 'nil excise duty' part. Who loses revenue here and how will that be compensated? Also, will this actually reduce pump prices for common people like us? Need more transparency from the ministry.
As a farmer from Maharashtra, this is welcome news! More demand for ethanol means better prices for sugarcane. But the government must ensure timely payments to sugar mills and farmers. Arrears have been a chronic issue. Policy without financial discipline won't help ground reality.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.