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 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. India’s alcohol and ethanol distillation capacity is around 787 crore litres per annum as on Nov. 30, according to data from the Department of Food and Public Distribution. Out of that, 519 crore litres are produced from molasses-based distilleries and 268 crore litres from grain-based units.