No amount to accrue to States from additional levy on coal blocks


The additional levy collected on coal blocks by the Centre, which is to the tune of ₹6,967.30 crore, will not accrue to the State governments, Parliament was informed on Monday.

Total funds received as additional levy from coal blocks are ₹6,967.30 crore, coal minister Pralhad Joshi said in a written response to a query in the Rajya Sabha.

The issue of an additional levy accruing either to the Central government or to the State government concerned was examined in consultation with the Ministry of Finance and the Ministry of Law and Justice. The Department of Legal Affairs, Ministry of Law & Justice was requested to obtain the opinion of Lead Additional Solicitor General (ASG) in the matter, Joshi informed the house.

“Lead ASG of India has opined that the amount would not accrue to the State governments. However, in the meantime, the government of Chhattisgarh has filed an original suit no. 5 of 2021 under Article 131 of the Constitution of India in the Supreme Court,” the Minister added.

The issue relates to the cancellation of coal blocks by the Supreme Court. In September 2014, the court declared allocations of all coal blocks through the Screening Committee and government dispensation routes since 1993 as illegal and arbitrary. Of the 218 blocks, it cancelled the allocation of 204 blocks.

In the case of 42 coal blocks, 37 were producing and five were expected to come under production; the cancellation will take effect from March 31, 2015. The apex court imposed an additional levy of ₹295 per tonne on the total coal extracted since the commencement of production from the coal mines to be deposited with the government.

Coal bed methane

In a separate query in Rajya Sabha on CBM policy, Joshi said the government had launched CBM bidding rounds I to IV (2001, 2003, 2005, and 2008), out of which 8 blocks are under operation and in the production/ development phase.

The total area of these 8 blocks is 2,430 sq km. In 2021, the government launched the Special CBM Bid Round (SCBM-21) and awarded 4 CBM Blocks covering an area of around 3,860 sq Km. At present, 12 CBM blocks are active, 5 of which are in the production phase, 3 in the development phase, and 4 blocks (awarded during SCBM-21) are under the exploration phase, he added.

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