GoI has imposed Excise Duty on coal @ 5% since Mar'11. Coal companies have started charging 5.15% in their invoices to MP State Electricity Board. In turn, the MPSEB has protested and paid ED @ 1.03% only after obtaining opinion of Tax Consulatant, as it is not availing CENVAT credit. The Coal companies are saying that the option of availing CENVIT credit and thus paying 1.03% ED is for Coal companies only and not for the purchaser of coal. The Coal India Ltd. has decided to pay ED @ 5.15% and opted not to avail CENVAT credit.
Kindly post necessay clarifications in this regard specifying whether the SEBs are bound to pay 5.05% ED to coal companies instead of concessional rate of 1.03% even when they are not availing CENVAT credit?
-Executive Director (O&M:Gen), MP Power Generating Co. Ltd. Jabalpur
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