by Janani Janarthanan (Bloomberg Quint) India has lowered the goods and service tax on ethanol meant for blending with gasoline as it looks to curb dependence on imported fuels. The GST on the alcohol has been cut from 18% to 5% under the Ethanol Blended Petrol Programme, Minister of State for Petroleum and Natural Gas Rameswar Teli said in response to a question posed in the Lok Sabha on Thursday during the ongoing winter session of parliament.
The NITI Aayog and Ministry of Petroleum and Natural Gas had prepared a report, “Roadmap For Ethanol Blending In India 2020-25”, in June which suggested tax breaks on ethanol. For better acceptability of higher ethanol blends, retail price of such fuels, the report said, should be lower than unblended petrol to compensate for the reduction in calorific value and incentivise switching to blended fuels.
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The procurement price of ethanol produced from sugarcane-based feed stocks like C and B heavy molasses, sugarcane juice, sugar and sugar syrup are fixed by the government, while those made from foodgrain-based feedstocks are set by state-run oil marketers annually. READ MORE
