Procedure for Payment of AED on Blending of Petrol at Depot Announced
[Circular No. 1085/06/2022-CX
dated 31 October 2022]
Subject: Mechanism for implementation of additional basic excise
duty ŪRs. 2 per litre levied on sale of unblended motor
spirit (commonly known as petrol)
As part of Budget 2022-23, an additional Basic Excise Duty @ Rs. 2 per litre
was levied on
unblended motor spirit (commonly known as petrol) intended for retail sale and the said duty rate was
to be applicable w.e.f 1st October, 2022. The date of effect was deferred to 1st
November, 2022 vide Notification No. 31/2022-Central Excise dated 30th September, 2022. The levy
of additional Basic excise duty on unblended motor spirit was introduced to promote blending
in the country.
2. Representations have been received seeking clarification on the mechanism
for levy of
additional central excise duty on unblended motor spirit, particularly as the blending
of duty paid motor spirit with duty paid ethanol takes place at depots after clearance from refinery. The difficulty faced by the OMCs is that
at the time of clearance of motor spirit from the refinery, the same are cleared
as intended for retail sale as blended but they are not able to estimate the quantity that will eventually be sold as unblended.
3. Therefore, to ensure smooth implementation of the differential
duty, the following procedures are hereby prescribed
in addition to the existing procedures:
(i) As per the current statutory
provisions, central excise duty shall be paid on motor spirit at the refinery stage. Where the motor spirit is cleared, as intended for retail sale after
blending, the manufacturers/refineries shall remove such motor spirit to the depots/terminals by paying
central excise duty as applicable for blended motor spirit.
(ii) Where the refinery removes
motor spirit as intended for retail sale to the depots for blending after payment
of duty as applicable to blended motor spirit, the following procedure must be
followed:
a) The refinery shall furnish
a running bond equal to the differential duty on the quantity removed from the
refinery to the jurisdictional Central Excise Commissioner with an undertaking to pay the differential excise duty along with interest as applicable.
b) Payment of differential
duty along with applicable interest on the quantity sold as unblended from depots shall
be made by 6th of the following month based on actual clearances of quantity of
unblended motor spirit from the depots.
c) A reconciliation statement, certified by the statutory auditor, shall be submitted to the jurisdictional Commissioner of Central Excise by the manufacturer/refinery by 10th of the month for every preceding quarter.
d) After such reconciliation, in case any short-payment of differential duty is found, the same shall be liable to be paid along with applicable interest.
e) Detailed records must be
maintained electronically at the depots/terminals which will be open
to checks by
officers of Central Excise.
4. Difficulty, if any, in the implementation of the Circular may be brought
to the notice of the Board.
F.No. 190354/295/2021-TRU