Budget 2023 : CBIC exempt CNG from the duty of excise leviable on amount of GST

Last updated: 01 February 2023

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The Central Government has announced an exemption from excise duty for Compressed Natural Gas (CNG) when it is blended with Biogas or Compressed Biogas (CBG). This exemption applies to the portion of duty attributable to the Biogas or CBG content within the blended CNG. The new rule comes into effect from 2nd February 2023 and requires manufacturers to maintain detailed records and submit reconciliation statements quarterly.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

Notification No. 05/2023-Central Excise

Dated : 1^stFebruary, 2023

G.S.R. ……… (E). – In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) (hereinafter referred to as the ‘Excise Act’), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts Compressed Natural Gas (hereinafter referred to as ‘CNG’), falling under tariff item 2711 21 00 of the Fourth Schedule to the Excise Act, when blended with Biogas or Compressed Biogas (hereinafter referred to as ‘CBG’), from so much of the duty of excise leviable thereon the amount of central tax, State tax, Union territory tax or integrated tax, as the case may be, paid on the Biogas or CBG contained in such blended CNG, subject to conditions specified in the Annexure below.

Annexure

Conditions

Manufacturer of such blended CNG shall:

(i) maintain detailed records regarding the quantum of Biogas or CBG blended with CNG, along with the value thereof, at the registered premises;

(ii) submit a reconciliation statement, certified by the statutory auditor to the jurisdictional Commissioner of Central Excise by 10th of the month following every quarter; and

(iii) pay the short-paid duty of excise along with applicable interest after such reconciliation.

Explanation. – For the purpose of this notification, “central tax, State tax, Union territory tax or integrated tax ” means the central tax, State tax, Union territory tax and integrated tax leviable under the Central Goods and Services Tax Act, 2017 (12 of 2017), State Goods and Services Tax Act of the State concerned, the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), and the Integrated Goods and Services Tax Act, 2017 (13 of 2017) respectively.

2. This notification shall come into force on the 2^ndday of February, 2023.

[F. No. 334/03/2023-TRU]

(Vikram Vijay Wanere)

Under Secretary

FAQ :

Compressed Natural Gas (CNG) when blended with Biogas or Compressed Biogas (CBG) is being exempted from excise duty.

The exemption applies to the duty of excise leviable on the amount of central tax, state tax, union territory tax, or integrated tax paid on the Biogas or CBG contained within the blended CNG.

Yes, manufacturers must maintain detailed records of the quantum and value of Biogas or CBG blended, submit a certified reconciliation statement quarterly, and pay any short-paid duty with interest after reconciliation.

This notification comes into force on the 2nd day of February, 2023.

The notification has been issued by the Government of India, Ministry of Finance (Department of Revenue).