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Clean energy cess-tax on coal

20 Nov 2020

The government of India introduced a cess on coal in the year 2010. It was like a carbon tax to be levied as an excise duty on items listed in the tenth schedule to the Finance Act 2010. These items are Coal Lignite and Peat. The purpose of levying this cess was to generate resources for financing and promoting clean energy initiatives, funding research in the area of clean energy and any other purpose related thereto. It was also very clear from the Finance Act 2010 that proceeds of the tax shall not be distributed to the states. When the cess was introduced it was to be at the rate of Rs. 100 per tonne, but when implemented it was effectively Rs. 50 per tonne as per notification dated 22/06/2010 to be effective from 01/07/2010.
In the Union Budget 2014-15, the rate of cess was increased to Rs. 100 per tonne. The original purpose of this fund was to finance and promote clean energy initiatives and research in the area of clean energy, but in the year 2014 while enhancing the rate the government also expanded the scope by including financing and promoting clean environment initiatives and research in the area of clean environment.
Source : https://www.timesnownews.com/business-economy/industry