Additional levy on operational blocks: Coal-bearing states, govt in tussle over transfer of funds

According to the Coal Controller’s office, the total amount of additional levy deposited till March 2016 in the central government’s account was Rs 6,149.64 crore.

Written by Aanchal Magazine , Anil Sasi | New Delhi | Updated: May 16, 2016 2:01 am
coal, coal mines, coal bllock allocation, centre state coal block, supreme court coal block allocation, additional levy coal blocks, chhattisgrah coal block allocation, odisha coal block allocation, india news, business news, economy news, latest news The Coal Mines (Special Provisions) Act, 2015 and the Coal Mines (Special Provisions) Rules, 2014, government officials said, do not specify to whom the amount of additional levy will accrue. (Source: Express Photo by Tashi Tobgyal)

A slugfest has erupted between coal bearing states such as Odisha and Chhattisgarh on one side and the Centre on the other, over the issue of the transfer of an additional levy on operational coal blocks mandated under a September 2014 Supreme Court order.

Chhattisgarh and Odisha are among the coal and lignite bearing states that have petitioned the Centre for the transfer of the additional levy amount that is being collected by the Central government over the last 20 months.

According to the Coal Controller’s office, the total amount of additional levy deposited till March 2016 in the central government’s account was Rs 6,149.64 crore.

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The SC had, in its September 2014 order, declared allocations of all coal blocks made through the coal ministry’s screening committee model and the government’s dispensation route since 1993 as illegal and arbitrary. Of the 218 blocks, it had cancelled allocations of 204. In the case of 42 coal blocks (37 producing and five likely to come under production), cancellation came into effect from March 31, 2015. The court had also imposed the additional levy of Rs 295 per tonne on the total coal extracted since the commencement of the production from the coal mines to be deposited with the government.

The levy was imposed under Section 22 of the Coal Mines (Special Provisions) Second Ordinance, 2014

Odisha had, on March 26, requested Centre to transfer the additional levy received from original allottee of Talabira-I coal block (amounting to Rs 566 crore) to the state. Chhattisgarh is also learnt to have raised a similar demand, though the amount could not be ascertained.

The Centre is yet to yield on the issue. According to the Union government, the Supreme Court order of September 24, 2014 ‘had not clarified’ as to whether the additional levy will accrue to the Central government or to the respective state governments that had executed the mining leases with the original allottees of the cancelled coal blocks.

Also, the Coal Mines (Special Provisions) Act, 2015 and the Coal Mines (Special Provisions) Rules, 2014, government officials said, do not specify to whom the amount of additional levy will accrue. A coal ministry official said that the finance ministry has been consulted on the demand made by the state and that the issue is still under examination.

A senior finance ministry official said that the government may consider transferring the collected levy in the shareable pool between States and Centre, but the financing needs of Centre also need to be kept in mind before deciding to transfer the levy to states. The finance ministry is, however, yet to take a final view on the issue, the official added.

According to the coal ministry, even as the states have raised question marks over the levy, as per Rule 18 of the Coal Mines (Special Provisions) Rules, 2014, the additional levy with respect to schedule II Coal Mines is to be clearly deposited by the allottee with the Central government.

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