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Home News Power Sector News Clean energy cess on coal, lignite, peat from July 1

Clean energy cess on coal, lignite, peat from July 1

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CoalThe clean energy cess imposed on coal, lignite and peat will come into effect from July 1, the Finance Ministry has said. The Finance Minister, Mr Pranab Mukherjee, had proposed the levy of a clean energy cess in Budget 2010-11 to build the corpus of the National Clean Energy Fund. The amount of cess will be Rs 50/tonne. The Finance Ministry has through the Clean Energy Cess Rules 2010 spelt out the manner in which the cess would be collected and assessed by the Revenue Department. Every producer of raw coal, raw lignite and raw peat will have to get registered with the jurisdictional central excise officer.

Also, the cess on these goods removed from a mine during a month will be payable by the 5 {+t} {+h} of the second month, following the month of removal, according to the Finance Ministry.

Simply put, cess on all coal, lignite and peat removed from a factory for the month of July 2010 should be paid to the exchequer by September 5, 2010.

Estimates are that the Rs 50/tonne cess on coal which will fund the new National Clean Energy Fund, will mobilise atleast Rs 3,250 crore in 2010-11. However, in the short run this cess will straight away increase power generation cost by about 3.5-4 paise per unit, which is actually less than 1% of the total cost of generation. Sectors like tea, steel, cement and fertiliser will also see some rise in their costs, since they all depend on coal in some way or other.

Analysts felt that the cess would lead merchant power generators to increase the price of power, which could have an impact on the domestic consumer who already had to face an upward revision last year, when state-owned Coal India (CIL) had revised its prices.


Source- Hindu


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