In the pre-GST regime, there was excise duty on coal at the rate of six per cent, stowing excise duty at Rs 10 per tonne of coal production, value added tax at five per cent (on intra-state sale), and central sales tax at two per cent (on inter-state sale). Post-implementation of GST, all these taxes and levies have been subsumed and GST of five per cent is being charged from consumers.
"We have estimated that on an average the reduction in rate on local sales is about five per cent and on the inter-state 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)," a Coal India official said.
He said the miner is facing an inverted tax structure in GST regime as its output is taxed at a lower rate while its inputs are taxed on higher rates.
"Coal has been made taxable at five per cent in the GST regime while taxes are ranging between 18-28 per cent on our inputs. Our output is taxed at five per cent while our inputs are taxed at higher rates. This is a kind of an inverted tax structure and, going forward, this will lead to refund situation."
The official also said that demonetisation did not have much of impact on the miner as most of the payments were made through online banking system.
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