Feature
Customs classification may hit India’s coal imports Coal Insights Bureau
T
he import of steam coal to India, particularly the high calorific value steam coal, may be severely affected, as Customs officials have recently issued notices to some importers and customers, asking them to pay higher duty on their imports after classifying their material as “bituminous coal” or coking coal, at least five industry sources told Coal Insights. By classifying higher calorific value steam coal from Indonesia and South Africa as bituminous coal, the consumers and traders may be asked to pay higher duties, a source from Gujarat claimed. “Already the high calorific value steam coal from the US are being classified by the customs officials as coking coal and the importers are being asked to pay CVD on the basic price of coking coal which in majority of the cases are more than double of steam coal prices,” he added.
32 Coal Insights, January 2013
Meanwhile, the officials of Directorate of Revenue Intelligence (DRI) in Gujarat have collected samples from various vessels that berthed between January 8 and January 18 at some ports in the state with US steam coal cargo to analyse and check if coking coal or bituminous coal is being imported in the name of steam coal, a second source said. “The customs department has collected samples of high calorific value steam from the vessels bringing in coal from at least three ports – Navlakhi, Muldwarka and Dahej – to analyse if companies are importing coking coal or bituminous coal in the name of steam coal,” he said. There is no duty on import on coking coal, but countervailing duty (CVD) of 6 percent is charged on the assessed price of the material. However, a duty of 5.5 percent in addition to CVD is charged on bituminous coal. Before sample collection by DRI, the customs officials had demanded from at least
two importers of US steam coal to pay CVD after they assessed the material as coking coal and valued the material at much higher price. “We had been asked to fork out additional `16 crore as CVD after the customs officials claimed that our US steam coal cannot be taken out of the port unless we pay higher CVD because according to them it was a coking coal, the price of which is about $100 per ton higher than that of steam coal,” an official of a company said. “We paid the duty under protest in order to take our cargo out of the port,” he said. The company had imported 6900 Kcal/ kg US steam coal at about $105 per ton fob, but the price of the material had been assessed by customs department at $205 per ton because of its high calorific value, he claimed. Because of the increase in assessed price, the CVD payable had gone up to $12.30 per ton on assessed price of $205 per ton instead of normal duty of $6.30 per ton on actual price of $105 per ton. “There is no logic in identifying steam coal as coking coal. Steam coal cannot be used as coking coal just because of high calorific value and it contains some amount of swelling index and mean reflector,” an industry expert said. “As per international norm, other properties like swelling index and vitrinite also has to be there besides swelling index of 5.0 and mean reflector of 1.0 in order to classify as coking coal,” he added.