Industry body Assocham on Saturday sought exemption from basic customs duty and countervailing duty for thermal or steam coal which increase power tariff by 25 paise a unit.
Imported coal from Indonesia is subject to imposition of 7.55 per cent customs duty and that from other countries invites 10.83 per cent duty. In addition, there is countervailing duty of 5 per cent.
This distorts the field in favour of domestic coal-based projects and discourages investments in imported coal-based projects, said Assocham's Secretary-General, Mr D.S. Rawat, in a communication to the Finance Ministry. Higher power tariff tends to have a recessionary impact due to a cascading effect on all goods and services. Major countries such as the US, Canada, Australia, Japan and Brazil do not levy any customs duty on import of thermal coal, said Assocham.