31 May 2012

Fixation of Royalty on Coal

The major coal producing States have proposed for fixation of royalty rates @ 20% ad-valorem basis, in place of the presently followed hybrid formula based royalty rates on coal and lignite. The proposal was considered by a Study Group, constituted by the Government to examine the issue of revision of royalty rates on coal and lignite. The Study Group held extensive deliberations on the issues involved and also held consultations with all the stakeholders. On the basis of the recommendations of the Study Group, the Union Government has finalised and accepted the proposal of the coal bearing States, including Assam, for shifting to ad-valorem based system of royalty rates. However, keeping in view the interest of consumer States and the Power sector, the Government has approved for 14% ad-valorem royalty on coal, which will come into force with effect from the date of publication in the Gazette of India. This information was gien by the Minister of State for Coal Shri Pratik Prakshbapu Patil in a written reply in Rajya Sabha.

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