New Delhi, Jun 11 (PTI) The government has extended excise duty exemption to petrol blended with higher levels of ethanol, according to a government notification.
Under the notification, excise duty has been reduced to nil on petrol containing 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol blends, expanding the existing exemption that was available for blends of up to 20 per cent ethanol.
Officials said the move should not be interpreted as an immediate rollout of higher ethanol blends in the retail market. The exemption is a regulatory requirement because blending ethanol with petrol at fuel depots is considered a manufacturing activity that could otherwise attract excise duty.
Till E20 (20 per cent ethanol doped in petrol), this was exempted by the Finance Ministry.
The extension of the tax waiver to E22 (blend of 22 per cent ethanol and 78 per cent petrol), E25, E27 and E30 blends is a preliminary step that would facilitate any future introduction of higher ethanol-content fuels, officials said.
Any rollout would be subject to extensive testing and consultations before implementation.
The measure is aimed at encouraging the use of ethanol-blended petrol as India seeks to reduce dependence on imported crude oil and increase the share of biofuels in its energy mix.
The notification comes as fuel prices remain under pressure. The federal government in March cut excise duties on petrol and diesel by Rs 10 per litre, sacrificing more than Rs 1 lakh crore in annual revenue, to shield consumers from rising global crude oil prices linked to tensions in West Asia.
In the notification, the ministry said excise duty will be ‘nil’ on petrol with 22 per cent, 25 per cent, 27 per cent, and 30 per cent ethanol blend.
The excise duty waiver is aimed encouraging customers to move towards ethanol-blended petrol.
The move come against the backdrop of petrol and diesel prices rising by nearly Rs 7.50 a litre in the second half of May. PTI JD ANZ TRB
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