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Due to various taxes levied on electricity generation, the general consumer is facing a burden of more than 25 thousand crores per year.
Taxes and cesses levied on coal are generally ignored in the midst of problems arising due to rising prices of petrol and diesel. Whereas different types of taxes on coal directly affect the monthly electricity bill of the consumer. Many taxes and cess are levied from coal production to use which directly affect the cost of electricity generated in the end. At present, coal accounts for about 55 percent of the electricity generation in the country and is a primary material for thermal power generation across the country. This was revealed in the information given by the Coal Controller’s Office and CEA Power Consumers.
Coal, though being a primary material for power generation, is subject to GST. But electricity which is an end product of coal is not in GST. Since coal producers cannot claim input tax credits, they add taxes to the cost of electricity which puts more burden on consumers.
The original price for the G-11 grade of coal, the most common for power generation, is Rs 955 per tonne produced by SECL. But due to taxes, levies and miscellaneous charges, the final pre-price for the generator has almost doubled to Rs 1,849 per tonne.
In this way coal becomes expensive
Coal currently levies 14 per cent royalty on basic price, five per cent GST, Rs 400 per tonne GST compensation cess, National Mining Exploration Tax at 2 per cent royalty and District Mineral Foundation charges 30 per cent royalty. This is followed by Paravaran and Vikas Upkar levy of Rs 23 per tonne and border tax / terminal tax of Rs 2 per tonne. Along with this, additional charges have to be paid for transportation and coal extraction etc. which are between Rs 121 to Rs 177 per ton.