India exempts biodiesel input materials from central excise tax

By Ron Kotrba | October 21, 2015

The Government of India amended its tax code Oct. 19 to benefit production of biodiesel.

The Department of Revenue at the Ministry of Finance issued a notice stating it is exempting goods used for production of biodiesel from central excise tax.

The biodiesel inputs that are specifically listed as now exempt from the 12.5 percent central excise tax are refined, bleached and deodorized (RBD) palm stearin, methanol, and sodium methoxide.  

Under its Indian subsidiary Universal Biofuels Private Ltd., California-based bioenergy company Aemetis Inc. owns and operates a 50 MMgy biodiesel plant near the port city of Kakinada on the East Coast of India. “With this prohibitive tax barrier to purchasing feedstock and other components removed, we believe Aemetis can, through our Indian subsidiary, achieve full production of biodiesel capacity in 2016,” said Eric McAfee, chairman and CEO of Aemetis. “This supportive tax policy for biodiesel shows the commitment of Prime Minister Modi to cleaner air, lower carbon emissions, increased foreign investment, expanded skilled jobs and decreased diesel imports.” The company added that about 80 percent of the 25 billion gallons a year of petroleum diesel consumed in India is imported.
“With the key tax notification now in place, we believe the entire biodiesel industry in India will benefit,” said Sanjeev Gupta, managing director of Universal Biofuels. “As a market leader in India, Universal Biofuels will move aggressively to source feedstocks from different suppliers in India and across the globe to achieve our revenue and profitability goals.”

The company says it plans to double production capacity at its Universal Biofuels plant to 100 MMgy. The Indian biodiesel industry’s production capacity is estimated today at only 250 MMgy, the company stated.  


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