Government Greenlights Tax Exemption for Ethanol-Blended Fuels

The government has announced excise duty exemptions for petrol mixed with 22% to 30% ethanol blends, aligning with BIS standards. This tax relief is detailed in notifications by the Ministry of Finance, aiming to promote eco-friendly fuel options while complying with established regulatory compositions.

In a bid to promote environmentally friendly fuel options, the government has rolled out excise duty exemptions on petrol blended with 22% to 30% ethanol. These fuel mixtures, if conforming to the Bureau of Indian Standards (BIS), will enjoy a nil duty rate—a move confirmed by recent notifications issued by the Ministry of Finance in The Gazette of India.

The regulations stipulate strict volume compositions for each blend to qualify for the exemption. The petrol-ethanol mixtures need to adhere to a specific composition—78% petrol and 22% ethanol for the 22% blend, complying with BIS specification IS 19850.

Further, the announcements clarify similar structural requirements for higher ethanol content blends, extending up to 30% ethanol. The excise duty terms encompass various levies as per the Central Excise Act, Finance Act of 2018 and 2002, and the Agriculture Infrastructure Cess as of 2021.