Miners call for waiver on coal GST compensation cess to incentivise gasification projects
India’s mining sector has called for removing the goods and services Tax (GST) compensation cess on coal to incentivise coal gasification projects, a key measure to reduce carbon emissions.
A Group of Ministers will decide the future of this cess, which will expire in 2026.
The government aims to gasify 100 million tonnes of coal by 2030, which is crucial to reducing India’s reliance on imported natural gas, methanol, and ammonia. Gasification involves converting coal into synthetic gas (syngas), which can be used for power generation and in the production of chemicals.
Industry representatives argue the removal of the cess, levied at Rs. 400 per tonne of coal, will provide a much needed boost to these projects.According to Shantesh Gureddi, president of the Federation of Indian Mineral Industries, the capital expenditure for coal gasification is substantial, with an estimated Rs. 6,000 crore required to set up a facility that utilises 2 million tonnes per annum of coal.
