
The government’s manifesto to waive a clean energy cess levied on coal is anticipated to bring down production costs for aluminium and steel producers who use it as a fuel mix. The proposal, which focuses to enhance the financial health of power utilities and distribution companies, was put ahead by the Prime Minister Narendra Modi’s office. Presently, a cess of INR 400 per tonne is levied on imports and production of coal.

This progress will comfort the aluminium and steel industry as it would bring down the production cost of aluminium and steel by INR 4,000-5,000 and INR 400-500 per tonne, respectively. Coal is used by captive power plants in the smelting process for producing aluminium. National Aluminium Co. Ltd., Hindalco Industries Ltd. and Vedanta Ltd. are probably to benefit from the tax waiver.
Aluminium producers will stand to get more benefit than Steelmakers, as steelmakers hugely depend on imported coking coal relatively than domestically produced thermal coal.
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