Budget 2014: Government to earn Rs 3,500 crore from import duty on coal

KOLKATA: The government is likely to earn Rs 3,500 crore from the 2.5% import duty levied on coal in the budget.

“Although the move was to rationalize the duty structure on various categories of coal, the government is likely to earn an additional Rs 3,500 crore from the segment this year. Earlier, coal imported for own use was exempt from any duty. However, there was confusion with respect to coal with high energy content and it was being levied an import duty of 2% at par with coking coal,” said Gautam Kumar, director at Asian Minerals.

Steam coal was duty free because the nation is grappling with a large demand-supply gap. This will result in a rise in power charges as well as steel prices since coal used in the steel industry is mostly imported.

The nation is likely to import around 195 million tonnes of coal this year – including thermal and coking coal. All this coal will now attract a duty of 2.5%.