In the wake of Finance Minister Arun Jaitley proposing raising the clean energy cess, the Indian Met Coke Manufacturers Association (IMCOM) on Tuesday appealed for the abolition of the cess on coking coal to save the metallurgical coke industry.
"The doubling of the clean energy cess will have a telling effect on the already dwindling metallurgical coke industry. It is for the third time in a row that the cess has been increased, " the IMCOM said in a press statement.
"To produce 1 tonne of met coke, 1. 5 tonne of coking coal is required with current price of coking coal being $90 per tonne.
Jaitley, presenting the budget for 2016 - 17 on Monday, proposed hiking the cess on coal, lignite and peat from the current Rs. 200 a tonne to Rs. 400 per tonne.
But the association noted that with the existence of a basic customs duty of 2. 5 percent on coking coal, the combined total duty and cess on coking coal to make 1 tonne of met coke for steel production comes to around 9 percent.
"With a customs duty of 5 percent on the value added product of metallurgical coke, there exists an inverted duty structure which has only got further skewed in this budget, " the association said.
Observing that the no carbon dioxide is produced in the conversion of coking coal into metallurgical coke, the IMCOM urged for removal of the customs duty on coking coal as well as to abolish the clean environment cess on coking coal by treating it different from the thermal coal.
"This would correct the anomaly of inverted duty structure, aide value addition in the country and would be a step towards Make in India in steel industry, " it added.