Aluminium Associations had sought removal of coal cess in Budget

17 Feb 2022 CW Team

The Aluminium Association of India (AAI) sought to eliminate coal cess in the upcoming Budget. It further said that a steep rise in coal had affected the sustainability of the industry.

The Ministry of Finance, Nirmala Sitharaman, will present the Union Budget for 2022-23 on 1 February.

AAI told the media that it is a highly intensive industry where coal contributes to 40% of the aluminium production cost.

It added that the Indian aluminium industry requests support in the upcoming Budget 2022-23. High cess on coal about Rs 400 per million tonnes (mt) to be eliminated to support power-intensive industries and retain competitiveness of the domestic industry.

The centre has created the National Clean Energy Fund (NCEF) with contributions from clean energy cess imposed on coal mined in India or imported overseas. Earlier, the cess was Rs 50 per tonne and raised to Rs 400 per tonne in 2016.

India's aluminium production cost has increased due to increased power cost in the last few years, with the increasing prices of coal, cess and logistic costs, and many more.

The industrial power cost in India is very high besides having the fifth-largest coal reserves.

AAI said major coal-producing countries are extending their support to reduce power and production costs and rendering competitiveness to the domestic aluminium industry.

The National Institution for Transforming India (NITI) Aayog highlighted the challenges of high power costs for Indian aluminium producers resulting in a competitive disadvantage in global players.

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Also read: Aluminium industry demands reduction in custom duty on raw

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