The GST Council has made big changes to coal taxes in its 56th meeting in New Delhi. They removed the GST compensation cess and raised the GST rate on coal from 5% to 18%. This will lower the overall tax on most types of coal.
New Delhi, 11 Sep 2025
The GST Council has made big changes to coal taxes in its 56th meeting in New Delhi. They removed the GST compensation cess and raised the GST rate on coal from 5% to 18%. This will lower the overall tax on most types of coal.
Lower taxes for power sector
The new rules will cut taxes on coal grades G6 to G17. The tax cut is between 13 and 330 rupees per ton. For the power sector, the average tax cut is 260 rupees per ton. This will make power cheaper by about 17 to 18 paise per unit. The changes will also make the tax on coal more fair based on its price.
Benefits for Indian coal industry
The new rules will help Indian coal compete better with imported coal. Before, a flat tax of 400 rupees per ton made high-quality imported coal cheaper than low-grade Indian coal. Now, with no cess, Indian coal can compete better. This will help India rely less on imported coal. The changes also fix a problem where coal companies had to pay more tax on things they bought than on the coal they sold. This was blocking their money.
The new coal tax rules will start soon. Follow The Rising News for more verified updates.
Updated 11 Sep 2025, 23:19 IST; source: link
