Summary:
Currently, different states have different taxation and incentives for blending of ethanol and biodiesel. "Tax on ethanol and biodiesel will be a disincentive and is like a punitive tax. Pune: The proposed 18% goods and services tax (GST) on ethanol and biodiesel could hurt the prospects of blending the former with petrol and the latter with diesel, feel industry players and experts.Biodiesel is extracted from different oils, most of which is imported. Elsewhere across the country, it is yet to take off.Ethanol blending with petrol hit a high of about 4% in FY16, before tapering off as sugarcane growth came under strain in FY17. Ethanol is mainly obtained from sugarcane residue, but can also be produced from various biowastes like agri-residue.Although petrol and diesel have been kept out of the purview of the GST for now, taxation on ethanol and biodiesel will mean that the cost of blending will result in higher cost of blended fuel..