Applicability of Central Excise exemption on Ethanol/ Methanol blended Petrol, and High-speed diesel blended with bio-diesel, when blending is done within the refinery

Last updated: 25 June 2021

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This circular clarifies the applicability of Central Excise duty exemptions for fuels blended within refinery premises. For ethanol/methanol blended petrol and bio-diesel blended high-speed diesel, the exemption is available provided that appropriate excise duties are paid on the petrol or high-speed diesel component, and GST is paid on the ethanol, methanol, or bio-diesel component. The duties must be paid by the due date, even if paid at the time of clearance of the blended fuel from the factory. Proper record-keeping of blending details and taxes paid is required.

Circular No. 1078/02/2021 -CX No. 341/02/2021-TRU Government of India Ministry of Finance Department of Revenue Tax Research Unit Room No. 146-J, North Block New Delhi,22ndJune, 2021 To All Principal Chief Commissioners/ Chief Commissioners of Customs GST All Principal Director Generals/ Director Generals of Customs GST Madam/Sir, Subject: Applicability of Central Excise exemption on Ethanol/ Methanol blended Petrol, and High-speed diesel blended with bio-diesel, when b

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FAQ :

The circular clarifies the applicability of Central Excise exemption on Ethanol/Methanol blended Petrol, and High-speed diesel blended with bio-diesel, when the blending is done within the refinery.

Exemption from Basic Excise Duty, Road and Infrastructure Cess (RIC), Special Additional Excise Duty (SAED), and Agricultural and Infrastructure and Development Cess (AIDC) is available on the blended fuel.

Conditions include paying appropriate excise duty on the petrol/diesel portion, paying appropriate GST on the ethanol/methanol/bio-diesel portion, and ensuring the blended fuel meets Bureau of Indian Standards specifications.

The excise duty on the motor spirit (petrol) or high-speed diesel component must be paid by the due date, which can be at the time of clearance of the blended fuel from the factory.

Yes, the clarification also applies to High-speed diesel oil blended with alkyl esters of long chain fatty acids (bio-diesel) when blending is done within the refinery.

Assessees must maintain proper accounts of blending and details of tax paid on both the motor spirit/diesel and the ethanol/methanol/bio-diesel used for blending.

Notification No : Circular No. 1078/02/2021 - CX
Source : https://www.cbic.gov.in/resources//htdocs-cbec/excise/cx-circulars/cx-circulars-2021/Circular%20No.%201078_02_2021-CX.pdf

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