Lok Sabha Question No. 375 (STARRED), answered on 2016-08-11
Subject: Environment Cess on Coal
Ministry: COAL
Asked by: BALABHADRA MAJHI

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA STARRED QUESTION NO. *375 TO BE ANSWERED ON 11.08.2016

## Environment Cess on Coal

## *375.  SHRI BALABHADRA MAJHI:

Will the Minister of COAL be pleased to state:

- (a) whether the Coal India Limited and its subsidiaries have assessed the impact of levying of clean environment cess on the revenue and production cost of coal, and if so, the details thereof;
- (b) whether  steps  are  being  taken  to  reduce  production  cost  of  coal  and  if  so,  the details and the outcome thereof;
- (c) the  details  of  'clean  environment  cess'  collected  by  the  Union  Government  on coal so far;
- (d) whether the said cess is not being transferred to the respective coal bearing States and if so, the details thereof and the reasons therefor; and
- (e) whether the amount so collected is spent for the generation of renewable energy in the country and if so, the details thereof and the reasons therefor?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  IN  THE  MINISTRY  OF  COAL, POWER, NEW AND RENEWABLE ENERGY AND MINES  (SHRI PIYUSH GOYAL)

- (a) to (e): A statement is laid on the Table of the House.

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## STATEMENT REFERRED  IN  PARTS (a) TO (e) OF THE REPLY TO LOK SABHA STARRED QUESTION NO.*375 FOR 11.08.2016

(a): Clean Environment Cess is collected from the customers and then deposited with the Government of India. Hence, no impact either on the revenue or on cost of production of coal by Coal India Limited (CIL) and its subsidiaries. At present the rate of Clean Environment Cess is Rs. 400/te. The Estimated amount of clean environment cess to be collected by CIL and  deposited  with  the  Government  of  India  for  the  year  2016-17  based  on  the  budgeted Estimated production of CIL is given as under:

| Particulars                                               |     ECL |   BCCL |   CCL |   NCL |   WCL |    SECL |   MCL |   NEC |      CIL |
|-----------------------------------------------------------|---------|--------|-------|-------|-------|---------|-------|-------|----------|
| Estimated Production of coal for 2016-17 (In Million Te)) |   46.94 |     37 |    67 |    82 |    48 |  149.67 |   167 |     1 |   598.61 |
| Estimated clean environment cess for 2016- 17(Rs. In Cr.) | 1877.6  |   1480 |  2680 |  3280 |  1920 | 5986.8  |  6680 |    40 | 23944.4  |

(b): The following measures have been taken by CIL to bring down the production cost of coal:

1. A cost  control  cell  has  been  established  in  Coal  India  Limited  Headquarter (CIL HQ) and all its subsidiaries.
2. E-reverse auction for finalization of contracts for explosives implemented.
3. Adoption of mechanization in both underground and opencast mines.
4. Converting unsafe, unviable underground mines into opencast mines.
5. Global  Positioning  System  (GPS)/GPRS  based  vehicle  tracking  system, electronic  surveillance  by  Closed-circuit  television  (CCTV),  radio  frequency identification (RFID) based boom barrier and reader & electronic weighbridges have been deployed at various subsidiaries for effective monitoring.
6. Higher size Heavy Earth-Moving Machinery (HEMM) has been planned to be deployed  in  major  open  cast  projects  for  maximum  extraction  of  coal economically.
7. Benchmarking of power and diesel consumption.
8. (c): As  per  the  information  received  from  the  Department  of  Revenue,  Ministry  of Finance,  Clean  Environment  (Energy)  Cess  was  imposed  under  section  83  of  Finance  Act 2010 on coal, lignite and peat.   The cess came into force w.e.f 01.07.2010.   The information on clean  environment cess under Indirect Tax collection during  financial  years  2010-11 to 2016-17 (upto June) are as given below:

(Amount in Rs. Crore)

| Sl No.   | Head of account       | 2010-11   | 2011-12         |   2012-13 |   2013-14 | 2014-15   | 2015-16   |   2016-17 (Upto June) |
|----------|-----------------------|-----------|-----------------|-----------|-----------|-----------|-----------|-----------------------|
| I        | Customs (0037)        | NA NA     | NA              |    135.41 |    451.09 | 1172.27   |           |                321.49 |
| II       | Central Excise (0038) | 1066.46   | 2579.55 3053.19 |   3081.72 |   5393.46 |           | 12675.60  |               5307.34 |

Source :-

Pr CCA/CBEC. NA=Not available with Pr CCA, CBEC, DOR.

(d) & (e): The  purpose of clean energy/environment cess was for financing and promoting clean energy initiatives, funding research in the area of clean energy, or for any other purpose relating thereto. The accruals of clean energy / environment cess are managed under National Clean Energy Fund (NCEF) under Department of Expenditure, Ministry of Finance  and  an  Inter-Ministerial  Group  (IMG)  constituted  under  the  Chairmanship  of Secretary  (Expenditure)  considers  the  proposals  for  funding  under  NCEF.    The  guidelines were amended in June 2014 to enable financing of schemes/programmes of the Ministry of New and Renewable Energy (MNRE).  Accordingly, following funds were provided from NCEF to the budget of MNRE.  Amount collected under NCEF is not being transferred to the respective coal bearing States.

( Rs in Crores )

| Financial Years   |   Budget grant without NCEF |   NCEF grant in Budget |   Total grant in Budget |
|-------------------|-----------------------------|------------------------|-------------------------|
| 2014-15           |                      515.18 |                1977.35 |                 2492.53 |
| 2015-16 (RE)      |                      262.07 |                4000    |                 4262.07 |
| 2016-17 (BE)      |                       88.79 |                4947    |                 5035.79 |

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