Indirect tax on coal to be lower, but cess to stay under reformed Indian indirect tax regime

India’s reformed indirect tax regime, the Goods and Services Tax (GST), will lower the cost of coal and electricity tariffs, but will not subsume the current rate of cess on the fuel. Under the GST, the indirect tax incidence on coal will be reduced to 5% from 11% at present, and according to a Coal Ministry official, power distribution companies would have the freedom to either pass on the benefit of lower fuel costs through a reduction in electricity tariff, or adjust the beneficial impact if existing tariffs were already up for revision.