In worst case scenario, Coal India's impact may touch Rs 35,000cr in SC mining tax ruling: Official

Coal India's financial impact may run into Rs 35,000 crore in a "worst-case" scenario if the Supreme Court's review on mining taxes yields no favourable outcome or if the company fails to recover the taxes from its customers, a top official said on Friday. The miner is awaiting final clarity before considering any "provisioning" in its accounts.

"Two subsidiary companies - Mahanadi Coalfields Ltd and Central Coalfields Ltd - are being affected, while the rest of the subsidiaries remain unaffected. Mahanadi Coalfields in Odisha is the most impacted. In the worst case scenario, our impact could be about Rs 35,000 crore, if we are unable to recover from long-term fuel supply agreements (FSAs) customers," Coal India Chairman P M Prasad said.

Talking to reporters on the sidelines of a Bharat Chamber of Commerce interaction, he said Central Coalfields in Jharkhand will be affected by about Rs 350 crore.



"However, we expect to recover a minimum of 75-80 per cent of the amount, as they are large state-owned power generation companies having FSAs. Then our final net impact may be Rs 6500-7000 crore," he said.

The Supreme Court recently allowed states to recover royalty on mineral rights and mineral-bearing lands from the Centre and mining companies since April 2005.

Prasad said that the matter is sub-judice and a three-member bench of the Supreme Court is expected to review the ruling.


According to the current ruling, the tax demand will be staggered in instalments over a 12-year period starting April 1, 2026.

However, a Coal India official said the company is waiting for final clarity before considering any provisioning.

Meanwhile, Prasad highlighted various developmental and diversification projects the miner has undertaken.

He said this fiscal the capex is aimed at Rs 20,000 crore.