Did the FM err?
AN alert Netizen sent us this mail.
What happens if the Budget Speech has a mistake? A cutting edge statement, but I am sure this would be unique in many ways – Please read on
Straight to the point : Relevant extract from the Budget Speech
“154. Harnessing renewable energy sources to reduce dependence on fossil fuels is now recognised as a credible strategy for combating global warming and climate change. To build the corpus of the National Clean Energy Fund announced earlier, I propose to levy a clean energy cess on coal produced in India at a nominal rate of Rs.50 per tonne. This cess will also apply to imported coal.”
Now let us look at the back up for this in the Budget Documents
++ Chapter VII of the Finance Bill 2010 refers to Clean Energy Cess as proposed by the Finance Minister.
++ Sr No 82(3) thereof refers to the said cess as duty of excise and is proposed to be levied on goods specified in the Tenth Schedule.
++ The Tenth Schedule however refers to the rate of Rs 100 per tone (and not Rs 50 per tone as per the Budget Speech) on coal, lignite, peat and other goods detailed therein in Sr No 1, 2 and 3.
Well, no conclusions drawn. I leave it to Netizens to do that.
This issue was answered by JM Kishore in our budget analysis Clean Energy Cess on Coals – FM puts 'Polluter Pays' Principle into practice – He had explained, “
What is the rate of cess ? Is it Rs. 100 PMT or Rs 50 PMT ?
Clause 82(3) of the Finance Bill specifies that “t here shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Clean Energy Cess, as duty of excise, on goods specified in the Tenth Schedule, being goods produced in India, at the rates set forth in the said Schedule ….” The schedule specifies the rates as Rs.100 PMT for each of the category. However, interestingly, Hon'ble Finance Minister's speech indicated that the levy is only Rs.50 PMT .
Relevant date for levy of the Cess :
The date from which the levy comes into effect, the rules and procedure of collection shall be notified after the enactment of the Finance Bill, 2010. Similarly, It is possible that the rate of the cess may be separately notified at a later date as Rs.50 PMT after the enactment of the Finance Bill 2010.
The JS TRU, in his DO letter had mentioned,
6. Clean Energy Cess:
6.1 A Clean Energy Cess is being imposed on coal, lignite and peat produced in India. This cess would be levied and collected as a duty of excise from coal mines. The rate of the cess, the date from which it will be effective and the rules and procedure for its collection shall be notified after the enactment of the Finance Bill, 2010.
So, after all it may be Rs. 50/-only!