Govt Slashes GST Rate On Ethanol From 18 Per Cent To 5 Per Cent  

Oil Marketing Companies, under the Centre’s EBP Programme, sell petrol blended with ethanol up to 10 per cent

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New Delhi: The central government on Thursday lowered the Goods and Services Tax (GST) rate on ethanol meant for blending under the Ethanol Blended Petrol (EBP) programme to 5 per cent from 18 per cent, according to news agency ANI.

Oil Marketing Companies (OMCs), under the Centre’s EBP Programme, sell petrol blended with ethanol up to 10 per cent. This programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from April 1, 2019, to promote the use of alternative and environment friendly fuels. This intervention also seeks to reduce import dependence for energy requirements and give boost to agriculture sector.

Government lowers GST rate to 5% from 18% on ethanol meant for blending under the Ethanol Blended Petrol (EBP) programme

— ANI (@ANI) December 16, 2021

The steps taken by the Centre to reduce dependence on imported gasoline include a number of policy initiatives for an increase in domestic crude oil production by generating quality geo-scientific data and its easy access, awarding new exploration acreage, expediting production from new development acreages, and focus on production maximisation from existing production acreages.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi had in November given its approval for fixing higher ethanol price derived from different sugarcane based raw materials under the EBP Programme for the forthcoming sugar season 2021-22 during ESY 2021-22 from December 1, 2021 to November 30, 2022.

In 2014, the government had notified administered price of ethanol. For the first time during 2018, differential price of ethanol based on raw material utilised for ethanol production was announced by the government. With this, the ethanol procurement by public sector OMCs has increased from 38 crore litre in Ethanol Supply Year (ESY) 2013-14 to contracted over 350 crore litre in ongoing ESY 2020-21.