Tax Break on Ethanol: Govt reduces GST from 18% to 5%

The encouraging initiatives on the supply side of ethanol has prompted the Government to advance the target of 20% ethanol blending in petrol in the country from 2030 to 2025-26.

Tax Break on Ethanol: Govt reduces GST from 18% to 5%
Representational Image/Reuters

New Delhi: The Government's view in order to increase the ethanol blending, the Minister of State for Petroleum and Natural Gas, Shri Rameswar Teli informed that govt has lowered Goods and Services Tax (GST) rate to 5% from 18% on ethanol meant for blending under the Ethanol Blended Petrol (EBP) Programme. 

In his written reply to Lok Sabha he mentioned, the procurement price of ethanol produced from sugarcane-based feedstocks like C & B heavy molasses, sugarcane juice, sugar, sugar syrup are fixed by the Government and from food grain-based feedstocks by Public Sector Oil Marketing Companies on an annual basis.

The measures taken by the Government to reduce dependence on imported gasoline include a number of policy initiatives for an increase in domestic crude oil production by generating quality geoscientific data and its easy access, awarding new exploration acreage, expediting production from new development acreages, and focusing on production maximization from existing production acreages. It has promoted the usage of biofuel in the country by notification of the National Policy on Biofuels (NPB) - 2018 which allows the use of multiple feedstocks for producing bio-ethanol for increased supply of ethanol for blending with petrol. The encouraging initiatives on the supply side of ethanol has prompted the Government to advance the target of 20% ethanol blending in petrol in the country from 2030 to 2025-26. The government has also notified Pradhan Mantri JI-VAN Yojna for promoting Second Generation (2G) ethanol production from cellulosic and lignocellulosic including petrochemical route in the country by providing financial support.