Plan to Impose Excise Duty on Unblended Petrol and Diesel Differed

·         The levy will now be Implemented from November 1 for Petrol and April 1, 2023 for Diesel

The government has deferred the plan announced in the Union Budget to impose an excise duty of ₹2 on unblended petrol and diesel from October 1, 2022.

The levy will now be implemented from November 1 for such petrol and for unblended diesel from April 1, 2023.

Union Finance Minister Nirmala Sitharaman had in her Budget for the fiscal year beginning April 2022 brought a ₹2 per litre additional levy on petrol and diesel that is not blended with ethanol and bio-diesel, respectively. This duty was to be applicable from October 1, 2022, but now has been differed to November 1.

Presently, 10% ethanol, extracted from sugarcane or surplus foodgrain, is blended or mixed in petrol (meaning 10% of ethanol mixed with 90 per cent of petrol) with a view to cutting oil import dependence and providing farmers with an additional source of income.

But there is only an experimental blending of bio-diesel, extracted from non-edible oilseeds, in diesel — the most used fuel in the country.

"Blending of fuel is a priority of this government. To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of ₹2 per litre from the 1st day of October 2022," Ms. Sitharaman had stated in her Budget speech in the Lok Sabha on February 1.

In the September 30 notification, her ministry stated that "petrol which is intended for retail sale, not so blended with ethanol or methanol" will attract ₹3.40 per litre basic excise duty effective November 1, 2022, instead of ₹1.40 a litre currently.

Branded petrol, not doped with ethanol, will attract ₹4.60 a litre excise duty as against ₹2.60 currently.

In the case of diesel, it said the fuel "intended for retail sale, not so blended with alkyl esters of long chain fatty acids obtained from vegetal oils, commonly known as bio-diesels" shall attract ₹3.80 a litre basic excise duty instead of ₹1.80. Branded diesel will attract ₹6.20 a litre basic excise levy as against ₹4.20 currently.

[Notification No. 31/2022 -Central Excise dated 30 September 2022]

G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), and in supersession of notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 01/2022-Central Excise, dated 1st February, 2022, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 90(E), dated the 1st February, 2022, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 11/2017-Central Excise, dated the 30th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 793(E), dated the 30th June, 2017, namely:-

In the said notification,-

I. in the Table, -

(i)    against Sl. No. 2, in column (3), after item (ii), the following proviso shall be inserted, namely:-

Provided that, with effect from the 1st day of November, 2022, nothing contained in this Sl. No. shall apply to motor spirit, commonly known as petrol, which is intended for retail sale to consumers, not so blended with ethanol or methanol as conforming to Bureau of Indian Standards specifications from time to time for blended motor spirit.”;

(ii)   after Sl. No. 2 and the entries relating thereto, the following serial number and entries shall be inserted, namely: -

“2A.

2710

Motor spirit commonly known as petrol which is intended for retail sale, not so blended with ethanol or methanol as conforming to Bureau of Indian Standards specifications from time to time for blended motor spirit-

 

 

 

(i) without a brand name;

Rs. 3.40 per litre

 

 

(ii) with a brand name.

Rs. 4.60 per litre”;

(iii)   against Sl. No. 3, in column (3), after item (ii), the following proviso shall be inserted, namely:-

“Provided that, with effect from the 1st day of April, 2023, nothing contained in this Sl. No. shall apply to High Speed Diesel (HSD), which is intended for retail sale to consumers, not so blended with alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as bio-diesels as conforming to Bureau of Indian Standards specifications from time to time for blended diesel.”;

(iv)  after Sl. No. 3 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

“3A.

27101930

High speed diesel (HSD) intended for retail sale, not so blended with alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as bio-diesels as conforming to Bureau of Indian Standards specifications from time to time for blended diesel -

 

 

 

(i) without a brand name;

Rs. 3.80 per litre

 

 

(ii) with a brand name.

Rs. 6.20 per litre”;

After the Table, the following proviso shall be inserted, namely: -

Provided that nothing contained in this notification shall apply to-

(a)   the goods specified against serial number 2A of the Table above before the 1st day of November, 2022;

(b)   the goods specified against serial number 3A of the Table above before the 1st day of April, 2023”.

[F. No. 190354/295/2021-TRU]