South Eastern Coalfields Ltd (SECL) has released provisional mine wise coal prices as per GST regime for Non-power sector. The new coal prices are effective from 1 Jul’17 onwards.
SECL has kept base prices unchanged in its new coal price listing. However, exemption from various Central and State government taxes (Excise Duty, VAT/CST etc) have caused coal prices to come down as a result.
Buyer’s will now have to pay additional tax of 5% on total coal price under GST regime, as the GST Council has kept coal at the lowest tax slab of 5%, which is down by 6.69 from the hitherto tax incidence of 11.69%.
Additional cost of INR 400/MT on account of Clean Energy Cess has been retained even after GST, and will be now known as GST compensation cess from Jul’17.
New Tax Calculation:
The affect of GST on coal prices has been evaluated by calculating coal price of Dipka Opencast Mine (ROM, G10 Grade coal).
GST implementation has no effect on Royalty on coal, NMET and DMFC charges. While additional charges like Forest Tax, Dump Charge, Sizing Charge, Surface Transportation charge, Vikash Upkar, Paryavaran Upkar and Seema kar will be applied according to the type of coal and location of mine.
| Particulars | Cost Before GST | Cost After GST |
| Base Price | 1180 | 1180 |
| Royalty @ 14% of Base Price | 165.2 | 165.2 |
| National Mining Exploration Trust Charges @ 2% on Royalty | 3.3 | 3.3 |
| District Mineral Foundation Charges @ 30% on Royalty | 49.56 | 49.56 |
| Stowing Excise Duty SED(INR 10/MT) | 10 | – |
| Sizing Charge | 79 | 79 |
| Vikas Upkar (INR 7.5/MT) | 7.5 | 7.5 |
| Paryavaran Upkar (INR 7.5/MT) | 7.5 | 7.5 |
| Seema Kar | 1.26 | 1.26 |
| Total(A) | 1503.32 | 1493.32 |
| Excise Duty @ 6% on Total (A) | 90.2 | – |
| GST @ 5% on Total(A) | – | 74.67 |
| Clean Energy Cess(now known as State Compensation cess) | 400 | 400 |
| Entry Tax | A/A | – |
| VAT/CST | A/A | – |
| TCS | A/A | – |
| Final Cost | 1993.52 | 1967.99 |
Source: SECL
Prices in INR/MT
As seen from the above calculation, price of coal has come down by INR 25.53/MT.
The lower GST value will help CIL to bring down coal inventories at mines, as it will encourage buyers to consume more domestic coal. In turn, CIL could take opportunity to increase coal base price, which had been revised two years ago.
Leave a Reply