Budget 2012: Reduce import duty on non-coking coal, says CII.

NEW DELHI: Industry chamber CII has urged the Finance Ministry to reduce import duty on non-coking coal used for power generation in the upcoming Budget.

In its pre-budget memorandum submitted to the Ministry of Finance, CII has requested the government to consider reduction in import duty on non-coking coal.

Import of coking coal, mainly used by the steel industry, is exempted from basic customs duty, whereas non-coking coal attracts basic customs duty of 5 per cent.

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.

High import duties on non-coking coal are resulting in increase in per unit production cost of electricity, it said.

"We have therefore asked (the Finance Ministry) for reduction of customs duty from 5 per cent to nil on non-coking coal to give some relief to users," the chamber said.

Other sectors which consume non-coking coal are cement, paper and captive power generation plants.

Non-coking coal production in India is less than the requirement and consequently users have no option but to import coal at a higher cost, it added.

Source : economictimes.indiatimes.com