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Odisha to refund excess royalty on inferior coal

Published on August 04, 2022
Current Context: Odisha becomes the first state to refund excess royalty collected from coal customers if they received inferior quality coal than contracted.
Odisha to refund excess royalty on inferior coal
  • The state is expected to repay Rs.300 crore royalty for coal supplied between April 2015 and March 2021 by Mahanadi Coalfields Ltd (MCL).
  • The customers can claim a refund from Coal India Subsidiaries and Singareni Collieries Company Ltd if they received coal of lower quality than paid for. In such cases, the companies will issue credit notes that can be adjusted in future payments.
  • Nonetheless, when sent to the state exchequer, there is no reimbursement made for royalty, District Mineral Fund (DMF), and National Mineral Exploration Trust (NMET) payments.
  • Royalty rates are fixed at 14% of coal price, DMF at 30% on royalty, and NMET at 2% of royalty, adding to 18.48% of the cost.
  • If coal received by customer are of higher quality than spent, the differential cost including royalty and other duties will be charged to customers.
  • Static Knowledge:
    • CM of Odisha - Naveen Patnaik
    • Governor of Odisha - Ganeshi Lal

Question: 

Q.1 Which state becomes the first state in India to refund excess royalty to customers if they received inferior quality coal than contracted?
a. Madhya Pradesh
b. Bihar
c. Haryana
d. Odisha

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