Business / Modi Govt cuts GST rate on ethanol meant for blending to 5 percent petrol price know detail

Business : Amidst the inflation of petrol, the Narendra Modi government at the Center has taken a big decision. In fact, the government has reduced the GST rate on ethanol from 18 percent to 5 percent under the Ethanol Blended Petrol (EBP) program. Let us tell you that under the EBP program, ethanol is mixed in petrol.

The government has notified the effective price of ethanol from 2014. For the first time during 2018, the differential price of ethanol was announced by the government based on the raw material used for ethanol production. The purchase of ethanol by public sector oil marketing companies has also increased. The Ethanol Supply Year (ESY) has increased from 38 crore liters in 2013-14 to over 350 crore liters in the current ESY year 2020-21.

To limit sugar production in the country and increase domestic production of ethanol, the government has taken several steps, including allowing replacement of heavy molasses, sugarcane juice, sugar and sugar syrup for ethanol production.

Benefits of blending ethanol: Due to mixing of ethanol in petrol, imports are expected to be cut. Let us tell you that India is the world's third largest oil importer, which is dependent on imports from abroad to meet more than 85 percent of its demand. This also reduces pollution and farmers also get a means of earning separate income.