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%.
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% 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.
