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Monday, March 19, 2012

More coal imports likely following duty reduction

Monday, 19 Mar 2012

Seeking to address the coal shortage affecting the power and steel sectors, government has announced a slew of measures for enhancing its availability in the Budget, a development welcomed by Coal India Ltd.

Mr Zohra Chatterji CMD of CIL said that "We welcome the removal of import duty on coal.”

The Coal Ministry is of the view that development would lead to an increase in import of fossil fuel to the country.

While presenting the Budget for 2012-13, Finance Minister Pranab Mukherjee said that "I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD (Countervailing Duty) of 1% to steam coal for a period of two years till March 31, 2014."

On the proposals, Coal Secretary Mr Alok Perti said that "The exemption will result in increase in import of non-coking coal by around one million tonnes as the prices of the dry fuel would come down.”

The coal ministry had pitched for the reduction in the duty and had even written to the Finance Ministry on the same prior to the budget announcement.

Singareni Collieries Company Ltd CMD S Narsing Rao, however, said the duty exemption would not have much impact on the domestic coal industry.

The government has proposed to remove 5% customs duty on non-coking coal.

According to an official in the state-owned firm, the duty exemption will also result in reducing the demand-supply gap of fossil fuel.

Power sector is one of the main consumers of non coking coal and nearly two third of the electricity generation in the country is coal based.

The power sector is likely to miss the non-coking coal import target of 55 million tonnes for the current fiscal as companies have imported only 30 million tonnes till December.

Source - www.indianexpress.com

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