Branded petrol will be charged an excise tax of Rs 4.60 per litre, compared to the current rate of Rs 2.60.

New Delhi:

The government has postponed an additional excise tax of Rs 2 per litre on unadulterated gasoline for one month and six months on diesel not blended with biodiesel.

The government eases the deadline to supply gasoline to November 2022 to avoid additional levies, and to April 2023 for diesel blended with biodiesel to give the industry more to implement oil import cuts measure.

In a gazette notice issued late on Friday (September 30), the Ministry of Finance said the additional excise tax will be imposed on petrol from November 1, 2022, and diesel from April 2023.

Federal Finance Minister Nirmala Sitharaman has imposed an additional tax of Rs 2 per litre each on petrol and diesel not blended with and biodiesel in her budget for the fiscal year starting April 2022. The tariffs were due to apply from October 1, 2022, but now the applicable date is November 1 for gasoline and April 1, 2023 for diesel.

Currently, 10% from sugar cane or surplus grain is blended or blended in gasoline (i.e. 10% ethanol mixed with 90% gasoline) to reduce dependence on oil imports and provide farmers with an additional source of income .

This will help avoid additional excise duties on petrol.

But only an experimental blend of biodiesel from the non-edible oilseed with diesel, the most used fuel in the country.

“Blending is a priority for this government. To encourage blending efforts, an additional differential excise tax of Rs 2 per litre will be imposed on unblended fuels from October 1, 2022,” Sitharaman said in her Budget speech February 1 in the People’s House.

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In a Sept. 30 notice, her department said that “petrol for retail sale, not mixed with or methanol” will be subject to a basic excise tax of Rs 3.40 per litre from Nov 1, 2022 instead of the current one. Rs 1.40 per liter.

Branded petrol unadulterated with will be subject to an excise tax of Rs 4.60 per litre, compared to the current rate of Rs 2.60.

In the case of diesel, it means “fuel for retail sale, not blended with long-chain fatty acid alkyl esters obtained from vegetable oils, commonly known as biodiesel”, with a basic excise tax of Rs 3.80 per litre instead of Rs 1.80. Branded diesel will be charged a base excise tax of Rs 6.20 per litre, compared to the current rate of Rs 4.20.

In addition to the basic excise tax, cess and special additional excise taxes are levied on petrol and diesel. The total excise tax is Rs 19.90 per litre for petrol and Rs 15.80 per litre for diesel.

While the additional tariffs will prompt oil companies to procure more for blending gasoline and arrange logistics to areas of shortage, the country is unlikely to build the infrastructure to produce biodiesel diesel on the needed for blending, industry officials said.

Last year, the government set a target of 20 percent blended with gasoline by 2025, five years ahead of its previous target, to help reduce reliance on expensive oil imports. A 10% ethanol blend was achieved earlier this year.

India is the world’s third largest oil importer and relies on foreign suppliers for more than 85% of its needs.

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(Apart from the title, this story was unedited by NDTV staff and was posted from a syndicated feed.)