| Date: |
31-01-2015 |
| Subject: |
Govt keen on resolving state-wise ethanol duty variation |
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NEW DELHI: You can get ethanol-blended petrol in Noida or Ghaziabad in Uttar Pradesh, but not in Delhi. This is because Delhi charges Rs 2 as "import duty" and UP levies Re 1 as "export duty" per litre of ethanol. This is not peculiar to this part of the country. Another eight states either charge some import or export duty or both on movement of ethanol.
The list of states includes some of the major sugarcane producing states such as Maharashtra, Gujarat, Haryana and Punjab. The practice is on despite UPA and now the NDA government pushing for more blending of ethanol in petrol. Ethanol is a cheaper and cleaner fuel.
Sources said road transport and highways minister Nitin Gadkari, who is pushing for more use of ethanol including introducing vehicles that can run on 85% and 90% blending of ethanol, is keen to resolve the prevailing "duties" across different states. There have been Supreme Court judgments recording how ethyl alcohol (95%) is not alcoholic liquor for human consumption.
"Since denatured ethanol cannot be used for human consumption but only for fuel, states should not impose any duty or taxes or restrict its movement. Denatured ethanol clearly falls under the Central list. This has also been upheld by two Supreme Court judgments, one a Constitution bench of seven judges," said Avinash Verma, secretary general of Indian Sugar Mills Association (ISMA).
The apex court had also held that in respect of industrial alcohol, states are not authorized to impose any taxes.
Verma added the association made a presentation on this before the parliamentary standing committee on petroleum recently and also to the government.
The sugar industry, which is now facing a huge financial crisis, is banking on the government's thrust on more blending of ethanol in petrol. This would prove a major revenue earner for the sugar factories.
The government has already announced in Parliament that necessary enabling steps would be taken to promote use of ethanol in public transport in cities in Maharashtra, UP, Karnataka and Gujarat where the demand can be met easily.
Source : timesofindia.indiatimes.com
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