Lower 5% GST on coal will mean affordable power: Goyal

20 May 2017

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The Goods and Service Tax regime will have no adverse impact on the cost of power and the lower tax on coal under the new dispensation will in fact help distribution companies (discoms) supply electricity at affordable rates, said power, coal, renewable energy and mines minister Piyush Goyal on Friday.

Piyush Goyal"The GST regime is designed to help bring down costs. As we have seen rates unfolding, we are a little more encouraged that GST will help the country reduce corruption and operational difficulties and also bring in a simpler tax regime," Goyal said.

"The coal sector will also benefit with straightaway benefits to consumers because (high) taxes used to be a burden on consumers of India. I am delighted that the GST Council has chosen to keep coal in the 5 per cent slab. I am sure that this will help discoms serve the poor and rural consumers with more affordable rates," he said.

The tax slabs announced by the GST Council on Thursday brought coal in the 5 per cent bracket against 11.39 per cent at present. On the performance of ministries under his watch, Goyal said there was no need for lower taxes to encourage clean energy, especially with grid-connected solar and wind power tariffs already falling to historic low. "The situation today is very different from the past. We can stand on our feet," he said.

On UPS and inverters being put in the higher tax bracket, Goyal said, "UPS and inverters are things of the past. Please don't go back to the past."

"This government has been able to maintain power prices at affordable levels and reduced it in most cases. NTPC (the National Thermal Power Corp) has been able to bring down their variable cost by 20 per cent.

''We don't need support of lower taxes to encourage renewable energy. By itself, it is good for the nation. It reduces pollution. It gives discoms 25-year-long affordable power at prices which are even below grid (parity price)," he said.

Solar power tariff had last week dropped to all-time low of Rs2.44 per unit, which is lower than the price of power from coal-fired units.

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