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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)
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