## Policy Analysis Report: Amendment to Central Excise Act, 1944 related to Ethanol Blended Petrol and Bio Diesel
**1. Executive Summary:**
This report analyzes a notification (No. 12/2022-Central Excise) issued by the Ministry of Finance, Department of Revenue, amending Notification No. 11/2017-Central Excise. The amendment introduces specific excise duty rates (Nil) for ethanol-blended petrol (EBP) containing 12% and 15% ethanol, conforming to BIS standards. It also modifies the definition for high-speed diesel oil blended with bio-diesel, specifying a blend up to 20% bio-diesel. This suggests a continued push toward biofuel blending. This report aims to inform affected industries of the specific changes.
**2. Introduction:**
The purpose of this report is to provide a detailed analysis of Notification No. 12/2022-Central Excise, dated July 4, 2022, focusing on the amendments it makes to the existing central excise duty structure, specifically concerning ethanol-blended petrol and bio-diesel. The analysis is solely based on the provided text of the notification.
**3. Policy Overview:**
* This notification is an **amendment** to the original policy, Notification No. 11/2017-Central Excise, dated June 30, 2017.
* The core objective, as inferred from the text, is to promote the use of biofuels (ethanol and bio-diesel) by providing specific excise duty rates (Nil) for certain blends and revising the existing definitions.
**4. Background and Rationale:**
The amendment likely aims to further incentivize the blending of ethanol with petrol and bio-diesel with diesel. The initial policy was established in 2017. The changes introduced via this amendment suggest a desire to expand the scope and clarity of the original policy regarding ethanol and bio-diesel blending by clarifying the scope and duties for specific blends (12% and 15% ethanol) and adjusting the bio-diesel blending definition to a maximum of 20%. This likely contributes to energy security and environmental goals.
**5. Key Provisions / Changes:**
This notification introduces the following key changes to Notification No. 11/2017-Central Excise:
* **Addition of New Entries (5C and 5D):** After Sl. No. 5B in the Table of the original notification, two new entries are inserted relating to Ethanol Blended Petrol (EBP):
* **5C:** Specifies "Nil" excise duty on EBP consisting of 88% motor spirit (petrol with paid excise duties) and 12% ethanol (with paid central, state, UT, or integrated tax), conforming to IS 17586.
* **5D:** Specifies "Nil" excise duty on EBP consisting of 85% motor spirit (petrol with paid excise duties) and 15% ethanol (with paid central, state, UT, or integrated tax), conforming to IS 17586.
* *Effect:* This change explicitly sets the excise duty to "Nil" for EBP with 12% and 15% ethanol, which provides a clear incentive for its production and consumption. Prior rates were less clear from this document alone.
* **Modification of Entry 6 (Bio-Diesel):** The description for high-speed diesel oil blended with bio-diesel is modified. The amendment changes the wording to allow for "High-speed diesel oil blended with bio diesel, up to 20 by volume," consisting of "80 or more of high speed diesel oil, on which the appropriate duties of excise have been paid and, up to 20 bio diesel on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case maybe, have been paid."
* *Effect:* This clarifies and broadens the definition of diesel blends, potentially increasing the allowable percentage of bio-diesel. The original wording, while not provided in full, clearly is being replaced to accommodate a different blending percentage or specification. The phrasing is now more precise, enabling blending *up to* 20%.
**6. Target Audience and Stakeholders:**
The primary target audience includes:
* **Oil companies and refineries:** Directly involved in the blending of ethanol with petrol and bio-diesel with diesel.
* **Ethanol and bio-diesel producers:** Benefit from the increased demand for their products.
* **Consumers of petrol and diesel:** Potentially benefit from lower fuel costs and environmentally friendly fuel options, albeit indirectly.
**7. Implementation Aspects (Inferred):**
* **Responsible agency:** The Central Board of Indirect Taxes and Customs (CBIC), under the Department of Revenue, Ministry of Finance, is likely responsible for implementing and monitoring the provisions of this notification.
* **Procedures:** The notification references adherence to Bureau of Indian Standards (BIS) specification IS 17586 for ethanol-blended petrol, implying quality control and certification procedures will be necessary for compliance.
**8. Expected Outcomes / Impact of Changes:**
The intended outcomes of these changes are likely to include:
* **Increased ethanol blending in petrol:** The "Nil" excise duty is expected to incentivize oil companies to increase the production and sale of EBP with 12% and 15% ethanol content.
* **Greater adoption of bio-diesel blending in diesel:** Clarification and adjustment of the bio-diesel blending definition up to 20% is expected to encourage greater use of bio-diesel.
* **Reduced dependence on fossil fuels:** By promoting biofuels, the policy contributes to reducing India's reliance on imported fossil fuels.
* **Support for the agricultural sector:** Increased demand for ethanol and bio-diesel can benefit farmers who produce feedstocks for these biofuels.
**9. Conclusion:**
Notification No. 12/2022-Central Excise represents a significant amendment to the existing central excise duty structure concerning biofuels. By providing specific excise duty rates for ethanol-blended petrol and clarifying the definition for bio-diesel blends, the government is attempting to create a more favorable environment for the production and consumption of these fuels. This policy amendment is crucial for the industry and is geared toward supporting India's energy security and environmental goals.
Key Entities Referenced
New Delhi: Location of the notification and Ministry of Finance office, New Delhi, Delhi
Ministry of Finance: The Indian government ministry responsible for revenue and finance.
Department of Revenue: The department within the Ministry of Finance responsible for revenue matters.
Central Excise Act, 1944: The primary legislation governing central excise duties in India.
Central Government: The government of India.
Government of India: The governing authority of the Republic of India.
Gazette of India: The official government gazette of India.
No. 112017Central Excise: Notification number related to Central Excise, dated 30th June, 2017
IS 17586: Bureau of Indian Standards specification for ethanol blended petrol.
Vikram Vijay Wanere: Under Secretary whose name appears in the notification.
No.012022Central Excise: A notification that amends the principal notification No. 112017Central Excise, dated 1st February, 2022
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-04072022-237055
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CG-DL-E-04072022-237055
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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.ं 476] नई दिल्ली, सगमिार, िुलाई 4, 2022/ वषाढ़ 13, 1944
No. 476] NEW DELHI, MONDAY, JULY 4, 2022/ASHADHA 13, 1944
जित्त मत्रं ालय
(रािस्ट्ि जिभाग)
अजधसचू ना
नई दिल्ली, 4 िुलाई, 2022
स.ं 12/2022-केन्दर ीय उत्प ाि िल्ु क
सा.का.जन. 510(अ).—केन्द रीय उत् पाि िुल् क अजधजनयम, 1944 (1944 का 1) की धारा 5क की उप धारा (1) के
तहत प्रित् त िजतियय का प्रयगग करते ुएए केन्द र सरकार, इस बात से संतुष्ट हगत े ुएए दक ससा करना िनजहत म वि् यक ह,
एतिद्वारा, भारत सरकार, जित् त मंत्रालय (रािस्ट् ि जिभाग) की अजधसूचना संख् या 11/2017-केन्द रीय उत् पाि िुल् क, दिनांक
30 िून, 2017, जिस े सा.का.जन. 793 (अ), दिनांक 30 िून, 2017 के तहत भारत के रािपत्र, असाधारण, के भाग II,
खंड 3, उप खंड (i) म प्रकाजित दकया गया था, म और वगे भी जनम्न जलजखत संिगधन करती ह, यथा:-
1. उक्त अजधसूचना म, सारणी म, -
(i) क्रम संख् या 5ख और उससे संबंजधत प्रजिजिय के प् चात जनम्न जलजखत क्रम संख् या और प्रजिजिय कग अंत:स्ट्थ ाजपत
दकया िाएगा, यथा: -
(1) (2) (3) (4)
“5ग. 2710 12 43 12% एथेनॉल जमजित पेरगल िग दक जमिण हग, - िून्द य
(क) वयतन के जहसाब से 88% मगटर जस्ट्प्रट(सामान्द यतया
जिसे पेरगल के नाम से िाना िाता ह) , जिस पर यथगजचत
4486 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
उत् पाि िुल् क का भुगतान कर दिया गया हग, और 12%
एथेनॉल जिस पर यथगजचत केन्दर ीय कर, राज्य कर, संघ राज्य
कर या एकीकृत कर, िग भी जस्ट्थजत हग, का भुगतान कर दिया
गया हग, का; और
(ख) िग भारतीय मानक ब् यरू ग के जिजिष्ट ीकरण IS
17586 कग पूरा करता हग ।
5D 2710 12 44 15% एथेनॉल जमजित पेरगल िग दक जमिण हग, - िून्द य ”;
(क) वयतन के जहसाब से 85% मगटर जस्ट्प्रट(सामान्द यतया
जिसे पेरगल के नाम से िाना िाता ह) , जिस पर यथगजचत
उत् पाि िुल् क का भुगतान कर दिया गया हग, और 15%
एथेनॉल जिस पर यथगजचत केन्दर ीय कर, राज्य कर, संघ राज्य
कर या एकीकृत कर, िग भी जस्ट्थजत हग, का भुगतान कर दिया
गया हग, का; और
(ख) िग भारतीय मानक ब् यरू ग के जिजिष्ट ीकरण IS
17586 कग पूरा करता हग ।
(ii) क्रम संख् या 6 के समक्ष, “िनस्ट्पजत तले ग स े अजभप्रप्त िसीय अम्ल की िीघ घ िृंखला के एजल्कल एस्ट्रग के साथ
सजम्मजित उच्च गजत डीिल तले , िग सामान्दय रूप स े ि जिक डीिल के रूप म ज्ञात ह” िब् ि से प्रारंभ हगन े िाल े
और “ एकीकृत कर का संिाय दकया गया हग”, िब् ि से समात त हगने िाले जहस्ट्स े के स्ट् थान पर जनम्न जलजखत कग
प्रजतस्ट् थाजपत दकया िाएगा, यथा: -
“वयतन के जहसाब से 20% तक के बायग डीिल के जमिण िाले हाई स्ट् पीड़ ड डीिल लयल, िग दक जमिण ह 80% या
इससे अजधक के हाई स्ट् पीड डीिल, जिस पर यथगजचत केन्द रीय उत् पाि िल्ु क का भुगतान कर दिया गया हग और 20% तक
बायग डीिल, जिस पर यथगजचत केन्द रीय कर, राज्य कर, संघ राज्य कर या एकीकृत कर, िग भी जस्ट्थजत हग का भगु तान कर
दिया गया हग”;
2. उक्त अजधसूचना म, स्ट् पष्ट ीकरण 2 म, अंक और अक्षर “5ख”, के प् चात अंक और अक्षर “,5ग, 5घ” कग अंत:
स्ट् थाजपत दकया िाएगा ।
[फा. स.ं सीबीवईसी-190354/295/2022-टीवरयू]
जिक्रम जििय िानरे, अिर सजचि
नगट : प्रधान अजधसूचना संख् या 11/2017-केन्द रीय उत् पाि िुल् क, दिनांक 30 िून, 2017, कग सा.का.जन. 793 (अ),
दिनांक 30 िून, 2017 के तहत भारत के रािपत्र, असाधारण, के भाग II, खंड 3, उप खंड (i) म प्रकाजित दकया
गया था और इसम अंजतम बार अजधसूचना संख् या 01/2022-केन्द रीय उत् पाि िुल् क, दिनांक 1 फरिरी, 2022,
सा.का.जन. 90 (अ), दिनांक 1 फरिरी, 2022 के तहत प्रकाजित, के द्वारा संिगधन दकया गया ह ।
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 4th July, 2022
No. 12/2022-Central Excise
G.S.R. 510(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, 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:-[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 3
1. In the said notification, in the Table, -
(i) after Sl. No. 5B and the entries relating thereto, the following Sl. Nos. and entries shall be inserted,
namely: -
(1) (2) (3) (4)
“5C. 2710 12 43 12% ethanol blended petrol that is a blend, - Nil
(a) consisting, by volume, of 88% motor spirit,
(commonly known as petrol), on which the appropriate
duties of excise have been paid and of 12% ethanol on
which the appropriate central tax, State tax, Union
territory tax or integrated tax, as the case maybe, have
been paid; and
(b) conforming to the Bureau of Indian Standards
specification IS 17586.
5D 2710 12 44 15% ethanol blended petrol that is a blend, - Nil”;
(a) consisting, by volume, of 85% motor spirit,
(commonly known as petrol), on which the appropriate
duties of excise have been paid and of 15% ethanol on
which the appropriate central tax, State tax, Union
territory tax or integrated tax, as the case maybe, have
been paid; and
(b) conforming to the Bureau of Indian Standards
specification IS 17586.
(ii) against Sl. No. 6, for the portion beginning with the words “High speed diesel oil blended with
alkyl esters of long chain fatty acids obtained from vegetable oils” and ending with the words
“integrated tax, as the case maybe, have been paid”, the following shall be substituted, namely: -
“High speed diesel oil blended with bio -diesel, up to 20% by volume, that is, a blend, consisting 80% or
more of high speed diesel oil, on which the appropriate duties of excise have been paid and, up to 20% bio -
diesel on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case
maybe, have been paid.”;
2. In the said notification, in Explanation 2, after the figure and letter “5B”, the figures and letters “,5C,
5D” shall be inserted.
[F.No. CBIC-190354/295/2022-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 vide notification No.01/2022-Central Excise dated the
1st February, 2022, vide number G.S.R. 90 (E), dated the 1st February, 2022.
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.