Budget 2014: Government doubles clean cess on coal to net Rs 6800 crore in FY15

NEW DELHI: The Union Budget has proposed doubling of the clean-energy cess on locally mined coal to Rs 100 a tonne, a move that will increase cost for power, steel and cement manufactures who consume the dry fuel.

India started imposing clean-energy cess on raw coal and lignite produced in India in July 2010.

The government expects to net Rs 6,857 crore in the current fiscal year through this levy and plans to utilise the amount to fund and promote research and initiatives in the area of clean environment. Last year, it collected Rs 3,527 crore.

Finance Minister Arun Jaitley said measures for enhancing domestic coal production are being put in place along with stringent mechanism for quality control and environmental protection. These steps include supply of crushed coal and setting up of facilities to wash coal to remove impurities such as ash, soil and rock.

The government is working to supply adequate coal to power plants commissioned before March 2015 to unlock dead investments. “An exercise to rationalise coal linkages, which will optimise transport of coal and reduce cost of power, is underway,” Jaitley said.

The minister sought to rationalise import tax. “At present, coal attracts customs duties at different rates. I propose to rationalise the duty structure on all non-agglomerated coal at 2.5% basic customs duty and 2% countervailing duty,” Jaitely said.

He also proposed levying a basic customs duty of 2.5% on metallurgical coke that is made from coking coal and used by the iron and steel industries.