GST On Coal To Save Rs 6,000cr; India Saves Rs 25900cr Forex: CIL
"Coal production has increased substantially in the last three years resulting in a saving of Rs 25,900 crore in imports for the country," Coal India's chairman Gopal Singh said at the company's annual general meeting here
Photo Credit : Reuters,
Consumers of Coal India is expected to benefit by Rs 6,000 crore in annual savings under the Goods and Service Tax (GST) while higher production by the company in the last three years helped the country save Rs 25,900 crore in foreign exchange owing to lower imports.
"Coal production has increased substantially in the last three years resulting in a saving of Rs 25,900 crore in imports for the country," Coal India's chairman Gopal Singh said at the company's annual general meeting here.
Singh said coal imports accounted for 25 per cent of the country's total consumption in 2015-16, and 23 per cent in 2016-17.
Coal India director (finance) C K Dey told shareholders that the GST impact on the company, We have estimated that on an average, the reduction in rate on local sales is about five per cent and on the interstate sales the rate of reduction in taxes is about three per cent. This (the reduction of tax rates) will give an advantage to the customers to the tune of Rs 6,000 crore (annually).
He said the miner is facing an inverted tax structure under the GST regime as its output is taxed at a lower rate while inputs are taxed at higher rates.
Coal has been made taxable at five per cent in the GST regime while taxes are raging between 18-28 per cent on our inputs. Our output is taxed at five per cent while out inputs are taxed at higher rates. This is a kind of an inverted tax structure and going forward, this will lead to refund situation, he said.
Singh emphasised on the swift exploitation of domestic fossil fuel reserves in order to meet future demand and reduce imports.
"The large planned new coal-based thermal capacity is likely to put pressure on coal resources. Coal-based power generation capacity of 125 gigawatt in 2012 and is likely to go up to more than 330-441 GW by 2040 (192 GW in FY2017). The demand for these plants is likely to be first met by domestic coal, which will require quick exploitation of our reserves.
"Import dependence in oil and gas is understandable given our poor reserves, but import dependence on coal particularly non-coking coal, is something that can be addressed by swift exploitation of domestic coal reserves," he said.
Singh said the share of coal in India's commercial primary energy supply was 55 per cent in 2015-16 and is expected to remain high at 48-54 per cent, even in 2040.
He added that the state-owned miner needs to achieve a double-digit growth rate in order to meet the production targets.
CIL has maintained its projection of one billion tonne coal production target by 2020
The company produced 554.14 million tonnes of coal in 2016-17, while coal off-take was 543.32 million tonnes during the same period.
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