Govt waives excise duty on 22%-30% ethanol-blended petrol:Move aims to promote cleaner fuels, higher ethanol adoption

The Centre has extended central excise duty exemptions to petrol blended with 22%, 25%, 27% and 30% ethanol, as part of its push to promote cleaner fuels and higher ethanol adoption. Under the revised framework, fuel blends meeting prescribed Bureau of Indian Standards (BIS) specifications will attract a nil rate of central excise duty. The decision was notified by the Ministry of Finance’s Department of Revenue through a series of notifications published in the latest issue of The Gazette of India. Specific blend ratios defined The notifications lay down detailed composition requirements that fuel blends must meet to qualify for the exemption. According to the Gazette, 22% ethanol-blended petrol must consist of 78% motor spirit (petrol) and 22% ethanol by volume. Applicable excise duties must have been paid on the petrol component, while the ethanol component must have attracted the relevant Central, State, Union Territory or Integrated GST. The blend must also conform to BIS specification IS 19850. The same structure applies to the 25%, 27% and 30% ethanol blends, with the proportion of petrol and ethanol adjusted accordingly. Maximum blend level included For the highest category covered under the exemption, 30% ethanol-blended petrol must comprise 70% motor spirit and 30% ethanol by volume. The notification specifies that all applicable taxes and duties must have been paid on the respective components and that the fuel must conform to BIS specification IS 19850. The move broadens the scope of excise duty relief beyond existing ethanol-blending levels and aligns with the government’s broader ethanol-mixing programme. Duties covered under the exemption The notifications clarify that “appropriate duties of excise” include levies under the Fourth Schedule of the Central Excise Act, 1944, the additional excise duty imposed under Section 112 of the Finance Act, 2018, and the special additional excise duty levied under Section 147 of the Finance Act, 2002. The exemption framework also covers the Agriculture Infrastructure and Development Cess imposed under Section 125 of the Finance Act, 2021.