Royalty remains at 14% ad-valorem; increase could hurt competitiveness of domestic coal
New Delhi, December 17: The Central government has no plans to revise the coal royalty rate, Minister of Coal and Mines G. Kishan Reddy informed the Rajya Sabha on Monday.
The clarification came in response to a query by Rajya Sabha member Sasmit Patra, who sought to know if the government was considering revising the coal royalty rate for Odisha.
The current royalty rate stands at 14% on an ad-valorem basis, meaning it is calculated based on the price of coal mentioned in the invoice, excluding taxes, levies, and additional charges.
“This ensures that with any increase in the price of coal, the royalty collection for states also rises,” the minister said in his written reply.
The minister further argued that raising the royalty rate would negatively impact the competitiveness of domestic coal compared to imported coal.
He also referred to a Study Group’s 2014 recommendation, which advised against increasing the royalty rate, a suggestion that was accepted by the government.
“The government has no plans to revise the existing rate of royalty,” Reddy concluded.