Power producers seek removal of double taxation on imported coal

NEW DELHI: Industry body Association of Power Producers (APP) has urged the Finance Ministry to provide relief from double taxation on imported coal for the dry fuel-starved electricity generating firms.

APP has shot off a letter to Revenue Secretary Ajay Bhushan Pandey seeking removal of Good and Services Tax (GST) on import freight for coal.

Power producers' troubles have mounted since the GST regime came into effect in mid2017. They are compelled to pay GST on import freight for coal even after paying tax on the CIF (cost, insurance and freight) value of the imported dry fuel, it said.

"We understand that several importers have challenged this levy of GST on ocean freight in various courts on the ground that once having paid IGST on full value of imported coal inclusive of freight element, charging GST again on ocean freight amounts to double taxation and is bad in law. However, till date necessary notifications to address the same has not been issued," APP Director General Ashok Khurana said in the letter.

He added that while the High Level Empowered Committee is devising means to alleviate stress in the power sector, the issue of avoidable double taxation still remains unresolved.

Close to a dozen imported coal dependent companies have approached the high courts of Mumbai, New Delhi and Gujarat to get the relief from double taxation.

In the past couple of years, companies such as JSW Energy, Global Coal Ventures, Victory Ventures, Sarogi Udhyog, Anmol India and Vertigo Impex have filed the petitions.

Petition by trade body All India Bulk Importer and Exporters Association too is pending before the Mumbai High Court.

Power producers are arguing that input credit of GST paid on imports is not available since power is out of the GST ambit.