Coal news and updates

MoC sets up panel to consider coal royalty revision

July 23: A study group, to consider revision of rates of royalty on coal and lignite, has been set up with the Additional Secretary, Ministry of Coal as the chairman of the panel, an official release has informed.

The panel will consider the following:

• Whether the present rates of royalty on coal and lignite should be revised, keeping in view the impact, if any, of such rates on coal consumers, revenue accruals to coal-producing states and other relevant factors.
• What should be the percentage hike from the present 14% ad valorem on the price of coal and 6% ad valorem on lignite.

The formula for stipulating the royalty rate by the Ministry of Coal is thus: R (royalty Rupee/ton) = a + bP where ‘P’ (price) shall mean basic pithead price of ROM coal and lignite as reflected in the invoice, excluding taxes, levies and other charges, and the values of ‘a’ as fixed component and ‘b’ as variable or ad valorem component.