Home / Industry / Energy /  Centre defers additional excise duty on un-blended auto fuels

Centre defers additional excise duty on un-blended auto fuels

The government has been encouraging ethanol blending of petrol in order to trim oil import bill given high global oil prices. (File Photo: Bloomberg)Premium
The government has been encouraging ethanol blending of petrol in order to trim oil import bill given high global oil prices. (File Photo: Bloomberg)

The government had proposed to change the effective rate of additional basic excise duty on unblended petrol and diesel. It was meant to promote blending of petrol with ethanol/methanol and blending of diesel with bio-diesel. As per that, an additional basic excise duty of 2 per litre on petrol and diesel, intended to be sold to retail consumers without blending, was to be levied effective 1 October.

NEW DELHI: The central government has deferred levying additional excise duty proposed in the Union Budget for FY23 on un-blended petrol and diesel, as per an official order.

The Central Board of Indirect Taxes and Customs (CBIC), in the order, said that the decision was made in public interest.

In the budget presented on 1 February, the government had proposed to change the effective rate of additional basic excise duty on unblended petrol and diesel. It was meant to promote blending of petrol with ethanol/methanol and blending of diesel with bio-diesel. As per that, an additional basic excise duty of 2 per litre on petrol and diesel, intended to be sold to retail consumers without blending, was to be levied effective 1 October.

A government official explained that the latest order refers to the implementation of the budget announcement. “It was provisioned that excise duty of 2 will be imposed on unblended petrol and unblended diesel from 1 October 2022. This notification defers the date of the implementation of that provision for unblended petrol by one month, i.e. 1 November 2022 and for unblended diesel by 6 months, i.e. 1 April 2023," the person said on condition of not being named.

The government has been encouraging ethanol blending of petrol in order to trim oil import bill given high global oil prices. Besides, blending of ethanol with petrol would boost the demand for ethanol and help sugar cane farmers. Oil marketing companies procure ethanol for blending. India has been trying to reduce its oil import dependence, but oil consumption continues to remain high in line with the needs of a growing economy. Policy makers are now encouraging electric mobility to cut down use of fossil fuels.

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