Coal tax hike, cess removal may bring down WBPDCL’s generation cost

Kolkata: The GST Council’s announcements to increase tax from the present 5% to 18% and scrap the Rs 400/tonne compensation cess on coal are likely to have a neutral effect on power tariffs in the state. However, West Bengal Power Development Corporation Limited (WBPDCL), a state PSU, will benefit as, according to primary calculations, its generation cost may reduce by 8-9 paise/unit.

Currently, a 5% GST is charged on the buying and selling of coal. In addition, a cess of Rs 400 is levied per tonne of coal, which goes to a fund created for compensating states for any revenue loss due to GST implementation since July 1, 2017.