Indicating its readiness to forego a large part of its revenue from coal mining if it results in a jump in the country’s coal production, the government on Wednesday approved a new market-determined revenue share model for auctioning off coal assets, ending the fixed fee/tonne regime that turned off private investors, even as the sector has gradually been opened up to them in recent years.
However, a coal miner in India still has to pay assorted taxes to the Central, state and local governments – including royalties, a hefty Rs 400/tonne GST compensation cess and contribution to district mineral funds – which work out to more than 50% of the base price of the fuel, much higher than in other coal-rich countries like Australia (7%), South Africa (11%) and the US (4%), analysts said.
