## Policy Analysis Report: Central Excise Amendment Notification No. 01/2022
**1. Executive Summary:**
This report analyzes the amendment to the Central Excise Act, 1944, specifically concerning excise duties on motor spirit (petrol) and high-speed diesel (HSD) intended for retail sale. The core purpose of this amendment, as inferred from the text, is to introduce specific excise duty rates for petrol and HSD *not* blended with ethanol/methanol or biodiesel, respectively, while clarifying the application of existing rates. Key findings include the establishment of new excise duty rates differentiated by the presence of a brand name for non-blended petrol and HSD sold for retail, effective October 1, 2022.
**2. Introduction:**
This report provides an informative analysis of Notification No. 01/2022 - Central Excise, dated February 1, 2022, which amends Notification No. 11/2017-Central Excise. This analysis is based solely on the provided policy text and aims to inform affected industries about the changes to excise duties on motor spirit (petrol) and high-speed diesel (HSD).
**3. Policy Overview:**
* **Amendment:** This notification amends the original Notification No. 11/2017-Central Excise, dated June 30, 2017.
* **Core Objective(s):** Based on the provided text, the core objective of this amendment is to specify excise duty rates for motor spirit (petrol) and high-speed diesel (HSD) intended for retail sale that are *not* blended with ethanol/methanol or biodiesel, respectively, and to clarify the applicability of existing excise rates based on blending status. The notification explicitly addresses non-blended fuels and the criteria for their taxation.
**4. Background and Rationale:**
* **Amendment Rationale:** The amendment addresses a need to differentiate excise duty based on whether motor spirit and high-speed diesel are blended with ethanol/methanol and biodiesel, respectively. The introduction of a new category for *non-blended* fuels suggests a policy shift to potentially incentivize blending or to more precisely manage excise revenues based on fuel composition. This could be due to evolving environmental policies or a desire to promote the use of biofuels.
**5. Key Provisions / Changes:**
This notification introduces the following key changes, effective October 1, 2022:
* **Exclusion for Blended Fuels:** It provides that the existing excise duty rates do *not* apply to motor spirit and high-speed diesel that *are* blended according to Bureau of Indian Standards (BIS) specifications. (This is indicated by provisos inserted after Sl. No. 2 and 3 in the Table of the original notification.)
* **New Excise Duty Rates for Non-Blended Petrol:** A new serial number (2A) is inserted, specifying excise duty rates for motor spirit (petrol) intended for retail sale, *not* blended with ethanol/methanol.
* Without a brand name: Rs. 3.40 per litre
* With a brand name: Rs. 4.60 per litre
* **New Excise Duty Rates for Non-Blended HSD:** A new serial number (3A) is inserted, specifying excise duty rates for high-speed diesel (HSD) intended for retail sale, *not* blended with alkyl esters of long chain fatty acids (biodiesel).
* Without a brand name: Rs. 3.80 per litre
* With a brand name: Rs. 6.20 per litre
* **Specific Change Effect:** The primary effect of these changes is the creation of a distinct excise duty structure for non-blended petrol and HSD sold for retail. This clarifies tax liabilities for these fuels and likely allows for distinct tracking and revenue collection based on blending status and branding. The excise rates differ depending on whether the product has a brand name.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are:
* **Oil Marketing Companies (OMCs):** Companies involved in the refining, distribution, and retail sale of motor spirit (petrol) and high-speed diesel (HSD).
* **Retail Fuel Outlets:** Businesses selling petrol and diesel directly to consumers.
* **Ethanol and Biodiesel Producers:** Companies involved in the production of biofuels.
* **Consumers:** Indirectly affected by potential price changes at the pump.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Department of Revenue, Ministry of Finance is the responsible agency for implementing these changes.
* **Timelines:** The changes are effective from October 1, 2022.
* **Procedures:** While specific procedures are not detailed in the provided text, it can be inferred that OMCs will need to adjust their accounting and reporting systems to accurately classify and report excise duties based on the blending status and branding of petrol and HSD. They will also need to comply with Bureau of Indian Standards (BIS) specifications.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these specific changes are:
* **Clearer Excise Duty Structure:** Provides a more transparent and defined excise duty structure for motor spirit and high-speed diesel based on blending status.
* **Revenue Management:** Enables the government to more accurately track and manage excise revenue from blended versus non-blended fuels.
* **Potential Price Impact:** The new rates may impact the retail prices of non-blended petrol and HSD, depending on market dynamics and company pricing strategies. The rates being different for fuels with and without branding may affect consumer choices.
**9. Conclusion:**
Notification No. 01/2022 introduces significant amendments to the Central Excise Act concerning the taxation of motor spirit and high-speed diesel intended for retail sale. By specifying separate excise duty rates for non-blended fuels and differentiating based on branding, the amendment aims to create a more refined and transparent excise structure. The implementation of these changes from October 1, 2022, will require careful attention from OMCs and other stakeholders involved in the fuel supply chain. This may have broader implications for the biofuel industry, consumer behaviour, and government revenues.
Key Entities Referenced
Central Excise Act, 1944: The central excise act under which powers are conferred to the central government
Central Government: The governing body authorized to make amendments in the notification related to central excise.
Ministry of Finance: The ministry under which the Department of Revenue operates.
Department of Revenue: The department within the Ministry of Finance responsible for the notification.
Central Excise: Refers to notifications and amendments related to central excise duties.
Gazette of India: The official government publication in which the notification is published.
Bureau of Indian Standards: Standards organisation for blended motor spirit and blended diesel.
High Speed Diesel: Fuel intended for retail sale to consumers, not so blended with alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as biodiesels as conforming to Bureau of Indian Standards specifications from time to time for blended diesel
New Delhi: Location of the Ministry of Finance and where the notification was issued.
Motor spirit: Fuel 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.
Vikram Vijay Wanere: Under Secretary
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-01022022-233048
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CG-DL-E-01022022-233048
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 90] नई ददल्ली, मगं लिार, फरिरी 1, 2022/माघ 12, 1943
No. 90] NEW DELHI, TUESDAY, FUBRUARY 1, 2022/ MAGHA 12, 1943
जित्त म्ं ालय
(रािस्ट्ि जिभाग
अजधसचू ना
नई ददल् ली, 1 फरिरी, 2022
स.ं 01/2022-केन्दर ीय उत्प ाद-िल्ु क
सा.का.जन. 90(अ .—केन्द रीय सरकार, केन्द रीय उत् पाद-िुल् क अधजनजयम, 1944 (1944 का 1 की धारा 5क की
उपधारा (1 द्वारा प्रदत् त िजतियय का प्रयगग करत े ुए, यह समाधान हगने पर दक लगक जहत में ऐसा करना आिश् यक ह,
भारत सरकार के जित् त मं्ालय (रािस्ट् ि जिभाग की अजधसचू ना सं. 11/2017 केन्द रीय उत् पाद-िुल् क, तारीख 30 िून,
2017 िग संख यांक सा.का.जन. 793(अ , तारीख 30 िून, 2017 द्वारा भारत के रािप्, असाधारण, भाग II, खंड 3,
उपखंड (i में प्रकाजि त की गई थी, का और संिगधन करती ह, अथाात् :-
उक्त अजधसूचना की अनुसूची में,-
(i) स्ट् तम् भ (3 में ्र..सं. 2 के सामने, मद (ii के पश् चात् जनम्न जलजखत परन्द तुक कग 1 अक् ूबर, 2022 स े
अंत:स्ट् थाजपत दकया िाएगा, अथाात् :-
“परन्दत ु इस ्र.. सं. म ें अंतर्विष्ट कगई बात मग र जस्ट्प्र जिसे साधारणतया पेरगल के रूप म ें िाना िाता ह , िग
उपभगतियाओं कग फु कर जि्र.य के जलए आिजयत ह, एथेनॉल या मथे नॉल के साथ इतना जमजित नहीं ह दक
जमजित मग र जस्ट्परर के जलए समय-समय पर भारतीय मानक ब्यूरग के जिजनदेि के अनरूु प हग।” ;
(ii) ्र.. सं. 2 और उससे संबंजधत प्रजिजष्टय के पश् चात् जनम्न जलजखत ्र.म संख या और प्रजिजष्टय कग 1 अक् ूबर,
2022 से अंत:स्ट् थाजपत दकया िाएगा, अथाात ्:-
672 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
“2क 2710 मग र जस्ट्प्र जिस े साधारणतया पेरगल के रूप म ें िाना िाता ह, िग
उपभगतियाओं कग फु कर जि्र.य के जलए आिजयत ह, एथेनॉल या
मेथनॉल के साथ इतना जमजित नहीं ह दक जमजित मग र जस्ट्परर के
जलए समय-समय पर भारतीय मानक ब्यूरग के जिजनदेि के अनुरूप
हग -
रु.3.40 प्रजत ली र
(i) ब्ांड नाम के जबना
रु. 4.60 प्रजत ली र
(ii) ब्ांड नाम के साथ
(iii) स्ट् तम् भ (3 म,ें ्र.. सं. 3 के सामने, मद (ii के पश् चात ् जनम्न जलजखत परन्द तुक कग 1 अक् ूबर, 2022 से
अंत:स्ट् थाजपत दकया िाएगा, अथाात् :-
“परन्दतु इस ्र.. सं. में अंतर्विष्ट कगई बात हाई स्ट्पीड डीिल (एच एस डी कग लाग ू नहीं हगगी िग उपभगतियाओं
के फु कर जि्र.य के जलए आिजयत ह, जिसे िनस्ट्पजत तेल से प्राप्त लंबी िृंखला फ ी एजसड के एल्काइल
एस्ट् र जिसे आमतौर पर ि ि-डीिल के रूप में िाना िाता ह , के साथ इतना जमजित नहीं ह दक जमजित
डीिल के जलए समय-समय पर भारतीय मानक ब्यरू ग के जिजनदिे के अनुरूप हग।”
(iv) ्र.. सं. 3 और इससे संबंजधत प्रजिजष्टय के पश् चात् जनम्न जलजखत ्र.म संख या और प्रजिजष्टय कग अंत:स्ट् थाजपत
दकया िाएगा िग अक् ूबर, 2022 के पहले ददन से प्रितानीय हगगा, अथाात ्:-
“3क 27101930 हाई स्ट्पीड डीिल (एच एस डी जमजित
डीिल, िग उपभगतियाओं के फु कर जि्र.य
के जलए आिजयत ह, जिसे िनस्ट्पजत तेल
से प्राप्त लंबी िृंखला फ ी एजसड के
एल्काइल एस्ट् र जिसे आमतौर पर ि ि-
डीिल के रूप में िाना िाता ह , के साथ
इतना जमजित नहीं ह दक जमजित डीिल के
जलए समय-समय पर भारतीय मानक
ब्यूरग के जिजनदेि के अनुरूप हग। रु.3.80 प्रजत ली र
रु. 6.20 प्रजत ली र
(i) ब्ांड नाम के जबना
(ii) ब्ांड नाम के साथ
[फा. सं. 334/01/2022- ी.आर.य.ू]
जि्र.म जििय िानेरे, अिर सजचि
र प्प ण : मूल अजध सूचना सं. 11/2017-केन्द रीय उत्पाद-िुल् क, तारीख 30 िून, 2017 कग संख यांक
सा.का.जन. 793(अ , तारीख 30 िून, 2017 द्वारा भारत के रािप्, असाधारण, भाग II, खंड 3,
उपखंड (i , में प्रकाजित की गई थी और अजध सूचना सं. 1/2021-केन्द रीय उत् पाद िुल् क, तारीख
1 फरिरी, 2021 द्वारा अंजतमबार संिगजधत की गई थी, िग सा.का.जन. 83(अ , तारीख 1 फरिरी, 2021
द्वारा भारत के रािप्, असाधारण, भाग 2, खंड 3, उपखंड (i में प्रकाजित की गई थी ।
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 1st February, 2022
No. 01/2022 -Central Excise
G.S.R. 90(E).—In exercise of the powers conferred by sub-section (1) of section 5A of the Central
Excise Act, 1944 (1 of 1944), 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[भाग II—खण् ड 3(i)] भारत का रािप् : असाधारण 3
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, in the Table, -
(i) against Sl. No. 2, in column (3), after item (ii), the following proviso shall be inserted with effect
from the 1st day of October, 2022, namely:-
“Provided that 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, with effect from the 1st day of October, 2022 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, with
effect from the 1st day of October, 2022 namely:-
“Provided that 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, with effect from the 1st day of October, 2022 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”.
[F. No. 334/01/2022-TRU]
VIKRAM VIJAY WANERE, Under Secy.
Note : The principal notification No. 11/2017-Central Excise, dated the 30th June, 2017 was 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 and last amended by notification No.1/2021-Central Excise, dated the
1st February, 2021 published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i), vide, number G.S.R. 83 (E), dated the 1st February, 2021.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.