Notification No. 29/2026-Central Excise, Dated 10-06-2026
The Central Government has amended Notification No. 3/2021-Central Excise dated 01-02-2021 to extend the benefit of Nil Agriculture Infrastructure and Development Cess (AIDC) to specified categories of ethanol-blended petrol.
The amendment seeks to promote higher ethanol blending in fuel by extending the concessional AIDC treatment to additional blending levels.
1. New Entries Inserted in AIDC Exemption Notification
The notification inserts new entries prescribing a Nil rate of AIDC for ethanol-blended petrol falling under Tariff Heading 2710 12.
The exemption covers specified blends containing higher proportions of ethanol by volume.
2. Ethanol Blends Eligible for Nil AIDC
The Nil AIDC rate has been extended to petrol containing:
-
- 22% Ethanol
- 25% Ethanol
- 27% Ethanol
- 30% Ethanol
by volume.
These blending categories have now been specifically included within the exemption framework.
3. Conditions for Availing the Exemption
The Nil AIDC benefit is available subject to fulfilment of the prescribed conditions.
4. Duty-Paid Motor Spirit Requirement
The blend must contain:
-
- Motor spirit (petrol) on which the appropriate duties of excise have been paid.
5. Tax-Paid Ethanol Requirement
The ethanol used in the blend must be one on which applicable taxes have been paid, including:
-
- CGST;
- SGST;
- Union Territory GST; or
- IGST,
as the case may be.
6. BIS Compliance Mandatory
To qualify for the exemption, the ethanol-blended petrol must conform to:
Bureau of Indian Standards (BIS) Specification IS 19850
relating to ethanol-blended motor spirit.
7. Objective of the Amendment
The amendment is intended to support the Government’s ethanol blending programme by providing tax incentives for higher ethanol-content fuel blends.
By extending the Nil AIDC benefit to petrol containing 22%, 25%, 27% and 30% ethanol, the Government seeks to:
-
- Encourage adoption of higher ethanol blends;
- Promote the use of renewable fuel sources;
- Reduce dependence on imported fossil fuels; and
- Support environmental sustainability objectives.
Impact of the Notification
The amendment provides a fiscal incentive for the production and supply of higher ethanol-blended petrol by eliminating AIDC on eligible blends.
The measure is expected to facilitate the growth of ethanol blending initiatives and contribute to the Government’s broader energy security and biofuel development goals.
