Consumers' Page

Present Coal Scenario:

India’s overall coal production in October ’22 has been 67.02 MT which is 9.09 MT more than the previous month. However, overall production in October has reduced by 4.55% on M-o-M basis. In terms of FY2022-23 so far, country’s overall coal production (483.59 MT) has gone up by 7.92% compared to the same period in last fiscal.

Country’s overall coal despatch (67.02 MT) has also shrunk slightly in October compared to same month last year (70.21) MT. Coal despatch to Power Sector has reduced by over 5.5% this month while despatch to Steel, Cement, Sponge-Iron and Others sub-sectors have shown signs of improvement. Coal despatch to CPP sub-sector has plummeted further to nearly 29% in October ’22 compared October ’21. However, India’s overall coal despatch so far this year has grown by 7.92%.

1. Submission by power sector seeking refund of differential GST amounts alongwith reimbursement for idle freight:

A number of subsidiary coal companies are providing refund against idle freight alongwith the GST components charged by the Railways. However, some of the subsidiaries such as SECL, MCL & WCL and are not providing refund of differential GST amount while providing reimbursement for idle freight.

As the Generators are paying freight charges to railways alongwith GST, non-refund of such a significant amount is leading to massive financial losses for the consumer. Request has been made to respective Subsidiaries and CIL so that differential GST amounts may be refunded as per the standard practice.

2. Submission by Power Sector regarding refund of ad-valorem charges in credit notes against grade slippage:

A number of Power Sector consumers have pointed out that while refunding the difference in base-prices of coal delivered to the consumers in case of grade slippage, ad-valorem taxes paid by the consumer alongwith advance coal value such as Royalty, DMF, NMET etc. are not being refunded by the coal companies. As grade slippage of coal is a recurrent issue in many of CIL subsidiaries, non-refund of ad-valorem taxes puts extra financial burden on the consumers.

Request has been made to CIL so that Royalty and ad-valorem taxes may be included during issuance of credit notes in case of grade slippage.

3. Submission by Power Sector regarding difference in invoiced quantity and Railway Receipt (RR) quantity from SECL:

ings, wagons are overloaded by the coal company during weighment at the loading points. However, railway makes necessary load adjustments as per permissible carrying capacity (PCC) before despatch of rakes. Therefore, coal quantity mentioned in the invoices issued by the coal companies is often higher than quantity mentioned in the RR. This added further cost to the freight paid by consumers for quantity not delivered.

Request has been made to SECL and CIL to conduct rake loading in such a way so that coal quantity mentioned the invoice may be same with the RR quantity.

4. Submission by Power Sector for reimbursement of complete under-loading charges by coal companies of CIL:

In case of underloading of rakes, charges should be borne by the coal companies in full. However, in most of the coal bills full amount is not refunded to the consumers. The coal company calculates underloading charges based on the difference between CC/stenciled capacity and actual weight of coal loaded in the wagons but railway charges freight as per permissible carrying capacity (PCC). In most cases, PCC is more than CC. Therefore, the consumers get a partial amount of underloading charges refunded from the coal companies.

As the responsibility of coal loading lies with the seller and consumers have no role in it, request has been made to CIL to make necessary amendments in the FSA so that consumers may get full refund against underloading of rakes

5. Submission regarding financial reconciliation of annual accounts:

As per practice prior to July 2014, rakes destined for one organisation, could be diverted to other organisation. For this reason, railway used to reconcile coal bills as well as freight. However, after July 2014 based on the circular

issued by Railway Board, rakes destined for one organisation cannot be diverted to other organisation. Therefore as per present practice, coal bill reconciliation is not required only freight reconciliation is required.

Request has been made to the Railway Board in line with change of railway operation as stated above, timely reconciliation of outstanding amount may please be considered so that consumers do not have to wait indefinitely.

6. Request for effective utilisation of higher grade coal available in different CIL Subsidiaries by supplying it to Industrial Sector:

Industries in general require low ash coal as high-ash coal lowers the reactor productivity, increases the fuel consumption rate and generally has a deleterious effect on solid direct reduction process. For every one percent increase in the ash content of coal, productivity of the industries come down at least by 2 percent in the ash range of 20-30 percent. The qualitative requirements of coal in both cement and sponge iron sectors are specified in the Indian Standard (IS) with recommended ash range of 24-27% for efficient usage in these industries.

It is seen that G2-G7 grades of coal in India have ash content within the recommended range specified in the IS standard but in lower grades of coal, ash content is much higher. As CIL produces around 15% of G2-G7 grades out of its total production, it is requested to MoC to ensure that high-grade and low-ash coal available in CIL mines be supplied to the Industries, so that such precious resources can be preserved and utilised scientifically.

7. Submission by NRS consumers requesting immediate release of longpending e-Auction rakes from SPURI& II sidings of MCL:

NRS Consumers procuring coal from SPUR – I & II sidings of MCL are struggling due to non-supply of a significant number of e-Auction rakes for more than one year. Some rakes are kept pending despite being higher on the indent seniority list. Thus, a huge amount of funds of these consumers are stuck with the coal company in the form of coal value advance for a prolonged period, limiting their resources to book coal from other (CIL auction/open market/imported) sources.

Request has been made to MCL and CIL to prioritise supply of long-pending rakes from MCL for NRS consumers at the earliest possible.