Overview

• The 56th GST Council scrapped the Rs 400 per tonne compensation cess on coal and raised the GST rate to 18%, according to the Ministry of Coal.
• Grade-wise reductions for G6–G17 coal are estimated at Rs 13.40 to Rs 329.61 per tonne based on the ministry’s fitment.
• Power utilities are projected to save about Rs 260 per tonne, which the ministry equates to roughly 17–18 paise per kWh in generation cost.
• Overall tax incidence is now modelled at a uniform 39.81% across grades, compared with earlier disparities such as 65.85% on G‑11 versus 35.64% on G2.
• Raising output GST removes the inverted-duty anomaly, enabling use of accumulated input tax credits and supporting domestic competitiveness over imports.