Guides · 1 Nov 2026

EBP supply and OMC invoicing for sugar mills

A mill supplies ethanol under the Ethanol Blended Petrol Programme by winning an allocation in the oil companies' tender, then delivering against indents to named OMC locations and invoicing each delivery at the notified rate plus transport and GST. For ESY 2026-27, starting 1 November 2026, the only sugar-based feedstock the tender accepts is C-heavy molasses, and it excludes cane juice, sugar, sugar syrup and B-heavy molasses.

The 2026-27 change

BPCL issued the tender on behalf of the oil companies on 16 October 2026. It seeks about 1,100 crore litres of denatured anhydrous ethanol for 1 November 2026 to 31 October 2027, in four quarters.

Reports say the Government directed that sugar diversion to ethanol be reduced to zero for this year. No offers were sought for ethanol from cane juice, sugar, sugar syrup or B-heavy molasses. C-heavy molasses stays eligible, along with grain feedstocks.

Three points follow for a mill distillery. Plan your cane-based supply on C-heavy only unless a later order changes this. Review your molasses balance, because feedstock now sets your volume. Read the litigation clause too. Reports say allocations remain subject to court proceedings, and the OMCs may revise or cancel quantities without liability after a court order.

The ESY 2026-27 tender document was not available to us. Commercial terms below come from the ESY 2025-26 tender corrigendum. Treat them as a guide and check each one against your letter of award.

From tender to delivery

Bid: quantities in kilolitres, by feedstock and by quarter, on the BPCL e-procurement portal.
Allocation: by OMC location and cluster. Cooperative mills under NFCSF and long-term offtake parties received preference in 2025-26.
Letter of award and purchase order: by OMC, with security arranged.
Indent: by location, with supply tracked monthly.
Dispatch: through the IEMS portal, which the OMCs use for procurement, indenting, dispatches and documents.
Invoice and payment: against delivered quantity.

Rates and commercial terms

The 2025-26 rate for C-heavy ethanol was Rs 57,970 per kilolitre, or Rs 57.97 a litre. In October 2026 ISMA said the price was unchanged from last year and asked for Rs 62.23. Confirm the rate in force before invoicing.

Term (ESY 2025-26)	What it said
Price	Basic rate plus any incentive. Only transport and applicable GST are paid extra.
Transport	Distance slabs in Rs per KL, such as Rs 306 per KL for 0 to 75 km
Security deposit	3% of basic LOA value, by bank guarantee or retention from first invoices
Price reduction	3% of the basic rate on the shortfall, if supply falls below 95% of the monthly indent or pro-rated quantity, after a 34 KL tolerance
Payment	Within 21 days
Additional quantity	10% provision
Feedstock proof	State excise certification, or certified documents if no excise officer is posted
Licences	CTO and PESO licences kept updated on the portal

Building the invoice

Each load should carry one clean chain of documents. The fields below are a practical list. Your purchase order and IEMS prompts set the final requirement.

Purchase order number and OMC location.
Feedstock, because rates differ by feedstock.
Quantity in kilolitres, on the agreed measurement basis.
Basic rate, any incentive and the transport slab.
GST at the applicable rate, with HSN under 2207. The GST Council cut ethanol for blending from 18% to 5%, and your tax adviser should confirm the current entry.
IRN and e-way bill, if your mill falls within those rules.
State excise pass or permit number.

State rules on movement

Excise controls run alongside the contract. The OMCs ran Uttar Pradesh's allocation separately in 2025-26, citing an excise rule that restricts supplies from outside the state. UP's 2019 rules require a Form PAMR-1 for every power alcohol load, and vehicles with an electronic device. Each state differs, so settle this with your excise officer before the first load.

Monthly reconciliation

Agree quantity dispatched, received and invoiced, by OMC location.
Compare supply with the monthly indent, and calculate any price reduction before the OMC does.
Match each payment to invoices, and chase items past 21 days.
Track retained security deposit by OMC.
Agree transit differences with the location, with reasons.
Tie ethanol issues to the excise account, in bulk and absolute litres.
Keep feedstock certificates by quarter.
Obtain a signed reconciliation at year end.

Tracking contracts

SugarOS, a sugar mill ERP, holds EBP contracts, turns call-offs into sales orders at the contract rate, keeps supply records from the gate with an OMC supply note, and runs invoices through its normal GST flow.

This is general information. Terms change by tender. Confirm rates, tax and excise steps with your OMC contact, accountant or legal adviser.

Frequently asked questions

Can a sugar mill supply B-heavy or juice ethanol in ESY 2026-27?

The tender of 16 October 2026 sought no offers for these feedstocks. Watch for any later order or corrigendum.

What is the ethanol supply year?

The recent tenders run from 1 November to 31 October. ESY 2026-27 covers 1 November 2026 to 31 October 2027.

What GST applies on ethanol sold to OMCs?

Reports of the GST Council decision and the rate entry show 5% for ethanol supplied for blending with petrol. Ask your tax adviser to confirm the current notification.

How fast do OMCs pay?

The ESY 2025-26 terms said 100% payment within 21 days. Check the term in your own purchase order.

What happens if we supply less than indented?

Under the ESY 2025-26 terms, a 3% price reduction applied to the shortfall below 95% after tolerance. Check your current award for the rule that applies.

Sources

Talk to SugarOS