The GoM had earlier approved 5% mandatory blending of auto-fuel with ethanol from October this year and Nabard package for the cooperative sugar mills. Both these proposals are sent to the Union Cabinet for final approval.
The industry has asked for deferment of payment of excise duty as they were crippled on account of drought in two successive years in the major cane growing regions. This year they faced the problem of falling sugar prices on account of surplus production. The finance ministry is, however, opposed to the idea of the deferment of payment of excise duty by sugar mills.
The GoM consists of agriculture minister Sharad Pawar, finance minister P Chidambarm, commerce minister Kamal Nath, apart from Mukherjee who chairs the panel. The GoM is also slated to deliberate on declaring ethanol as goods of special category under 5A of Central Sales Tax Act.
At present state governments are allowed to impose state levy on ethanol and the sales taxes imposed by state governments vary widely.