Centre lifts excise duty on higher ethanol-blend petrol to popularize biofuels
The Union government has removed central excise duty on petrol blended with higher quantities of ethanol (22%, 25%, 27%, and 30%) to popularize biofuels. This exemption aims to prevent a dual levy, as petrol already bears excise duty and ethanol bears GST. While this is a preliminary step for introducing higher blends, the government clarified it does not indicate an immediate rollout, which will follow extensive testing and consultation. Industry associations have welcomed the move, seeing it as a strong signal of policy stability and commitment to attracting investments in the ethanol blending value chain.
Key Points
- The Union government exempted higher ethanol-blend petrol (E22, E25, E27, E30) from central excise duty.
- This measure aims to popularize biofuels and prevent a dual levy on the blended product.
- The exemption is a preliminary step towards eventually introducing higher blends, pending further testing and consultation.
- Industry associations have praised the move as a positive signal for investment in the ethanol blending sector.
Exam Facts
- Exemption applies to E22, E25, E27, and E30 ethanol-blended petrol variants.
- Ethanol bears GST, petrol bears excise duty.
- India formally launched the E85 variant (85% ethanol blended with 15% gasoline) on June 5.
- C.K. Jain is President of the Grain Ethanol Manufacturers Association (GEMA).
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