Government's earnings from stowing excise duty to double: Sriprakash Jaiswal

NEW DELHI: The Coal Ministry today said the government's revenues from stowing excise duty will double to Rs 1,100 crore per annum following the decision of the Union Cabinet to hike this statutory levy on coal dispatches.

The maximum 'stowing excise duty (SED)' was raised to Rs 50 a tonne from Rs 10 a tonne at a meeting of the Union Cabinet chaired by Prime Minister Manmohan Singh last evening.

Following the decision, the Coal Ministry has hiked stowing duty from Rs 10 a tonne to Rs 20 a tonne for the time being.

"The government used to get Rs 550 crore per annum on SED of Rs 10 per tonne. With SED now being increased to Rs 20 a tonne, this amount would be doubled," Coal Minister Sriprakash Jaiswal told reporters on the sidelines of a Power Summit organised by BloombergUTV here.

Stowing excise duty -- which is levied for rehabilitation, stowing and infrastructure development of abandoned mines -- stood at Rs 2.50 per tonne of coal when introduced in the early seventies.

"The cap on SED has been increased from Rs 10 at present to Rs 50," Jaiswal had said yesterday after the Cabinet meeting.

He said the increase in the limit of SED would have no impact on domestic coal prices.

"Now, we can increase the SED to Rs 50 per tonne," an official said.

Stowing excise duty is levied on total raw coal dispatches from mines.

Till now, the Coal Controller's Organisation collected a stowing excise duty of Rs 10 per tonne on coal production and dispatches.