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Business
Jharkhand demands coal be excluded from GST framework
✍️ Moneycontrol.com
🗓 13 Oct 2026, 05:17 AM
👁 17
The Jharkhand government has urged the Centre to remove coal from the Goods and Services Tax regime, arguing that the current tax structure hampers the state's revenue and mining sector.
Jharkhand's state administration has formally requested that coal be taken out of the Goods and Services Tax (GST) framework, a move it says is essential to safeguard the state's fiscal health. The demand was conveyed to the Union Finance Ministry through a detailed memorandum outlining the state's concerns.
According to the memorandum, the uniform GST rate on coal erodes the state's revenue share and creates a competitive disadvantage for local miners, who face higher compliance costs compared to those operating under the earlier excise regime. Officials argue that coal, being a strategic mineral and a major source of state income, requires a distinct tax treatment.
The Centre has not yet responded to the request, but sources indicate that the finance ministry will review the proposal alongside other state demands pending in the GST Council. Analysts suggest that any amendment could set a precedent for other mineral‑rich states seeking similar exemptions.
If the exemption is granted, Jharkhand expects an increase in its fiscal receipts and a boost to the coal mining sector, which contributes significantly to both state and national energy supplies.
According to the memorandum, the uniform GST rate on coal erodes the state's revenue share and creates a competitive disadvantage for local miners, who face higher compliance costs compared to those operating under the earlier excise regime. Officials argue that coal, being a strategic mineral and a major source of state income, requires a distinct tax treatment.
The Centre has not yet responded to the request, but sources indicate that the finance ministry will review the proposal alongside other state demands pending in the GST Council. Analysts suggest that any amendment could set a precedent for other mineral‑rich states seeking similar exemptions.
If the exemption is granted, Jharkhand expects an increase in its fiscal receipts and a boost to the coal mining sector, which contributes significantly to both state and national energy supplies.