Coal news and updates

The Centre has nudged the Mamata Banerjee-government to cut cess on coal, but the state remained non-committal to chopping off one of the big sources of revenue for debt-laden Bengal.

 

Union coal and power minister Piyush Goyal met his state counterpart today and initiated the formation of a high-powered committee to look at the possibility of aligning the coal levy with the rest of the country.

 

Bengal charges more for every tonne of coal compared with other major producers such as Jharkhand, Chhattisgarh and Odisha - a source of continuous friction with the Centre.

 

"I have advised the state government to form a committee constituting the Bengal power secretary, the chiefs of power generation and distribution companies and directors (marketing and finance) of Coal India. They will prepare and submit a report to my office within four weeks on the benefits and drawbacks of the levy structure in Bengal," Goyal said after a review meeting with state power minister Sobhandeb Chatterjee.

 

Former power minister Manish Gupta and department officials were also present at the meeting.

 

Bengal charges 25 per cent cess per tonne on the price of coal in addition to a royalty of Rs 2.5-6.5 a tonne. No other state has a cess on coal but they charge royalty, fixed by the Centre but collected by states, at a higher rate. However, the total incidence of the state levy is higher in Bengal.

 

Since Bengal has the unique cess, the Centre did not hike royalty rates for the state since the early 1990s even as it revised the same for others, with the latest being 14 per cent on the price of coal introduced in 2012. The Bengal cess has two components: a rural employment cess of 20 per cent and a primary education cess of 5 per cent.

 

Coal companies collect the duty from their customers and pay it to the state government.

 

Bengal earned revenues of Rs 1,442.44 crore as cess and Rs 13.04 crore as royalty in 2014-15. Jharkhand and Chhattisgarh earn more than Bengal because of their higher production of coal. Coal is the prime source of electricity in India.

SOurce: Telegraph