NEW DELHI, Sep 11: The Indian government has announced that GST reforms will decrease the overall tax on coal and reduce the cost of power generation.
The GST Council has recommended the removal of the GST Compensation cess and an increase in the GST rate on coal from 5% to 18%.
The new reforms will bring down the overall tax on coal grades G6 to G17, ranging from Rs 13.40 per tonne to Rs 329.61 per ton.
The average reduction for the power sector is Rs 260 per tonne, reducing generation costs by 17 to 18 paise/kWh.
The reforms will also help rationalize the tax burden on coal vis-à-vis its pricing, reducing the tax incidence across all categories of coal to a uniform rate of 39.81 per cent.
The reforms will also remove the inverted duty anomaly by raising the GST rate to 18%. (PTI)
