Coal consumers urge government to reduce tax burden in GST

Kolkata, Oct 31 (IANS) India’s coal consumers have suggested that the central government should subsume all central and state taxes levied on coal in the proposed Goods and Services Tax as almost 50 per cent of the cost of coal currently involves levies under different heads, a consumers’ representative said on Monday.

“We humbly suggest that all these taxes levied on coal be subsumed in GST uniformly so that the indirect tax burden of different heads is reduced.

“Such uniform taxation regime would create level playing field both in power as well as non-power sectors across the states and would also act as deterrent for the usage of imported coal thereby reducing the current account deficit,” said a letter sent by Coal Consumers’ Association of India to Union Commerce Minister Nirmala Sitharaman.

Coal consumers contend that apart from common taxes on all collieries, several state-specific taxes and additional levies are also charged on coal.

“Nearly 50 per cent of the cost of coal involves taxes and levies under different heads. Except West Bengal, royalty at the rate of 14 per cent is being levied on all collieries. In addition, levies for National Mineral Exploration Trust, District Mineral Foundation, a clean energy cess of Rs 400 for every million tonnes of coal and other taxes are being imposed,” Association’s Secretary General Subhasri Chaudhuri told IANS.

Among state-specific taxes, Chhattisgarh levies environment and development tax while Madhya Pradesh imposes forest and terminal tax. West Bengal charges 20 per cent cess for rural employment and five per cent for primary education. Royalty in West Bengal varies from Rs 2.50-6.50 on different grades of coal, she said.

Coal consumers also said that in addition to 6 per cent excise duty, there were additional charges above rail freight.

“There are busy season surcharge at the rate of 15 per cent and development charge at five per cent being levied above Railway freight. Swachh Bharat and Krishi Kalyan cess at the rate of 1.5 per cent each on the total freight are also imposed,” Chaudhuri added.