The ministry of commerce has asked the finance ministry to consider waiving off the 26.33% duty being levied on the coal exported by public sector Coal India Limited (CIL) to Bhutan.
Seeking waiver of this duty, the commerce ministry in a recent letter to the ministry of finance ministry said, ?Bhutan is entirely dependent upon Indian supplies for most of its needs and India enjoys very cordial and constructive relations with Bhutan.
Moreover, Bhutan is also an LDC in South Asia and by virtue of bilateral Free Trade Agreement (FTA), the trading between India and Bhutan takes place at zero import duty. The subject matter is of interest to us as it affects trade relations between India and Bhutan.?
This additional duty is being charged by CIL on its current notified price of coal. Confirming the move, a senior CIL official said that exports of coal to neighbouring countries attracts a premium over domestic prices.
Bhutan has been seeking the waiver of this export duty ever since 2004. Sources said the issue was again raised by the Bhutan government at the recent SAFTA ministerial council meeting, held on March 3. The Bhutan government owned Penden Cement Authority buys its coal requirements from CIL.
?Imposing an export duty of 26.33% on coal supplied by CIL has seriously disadvantaged the company (Penden Cement Authority), affecting the competitiveness of its products. Bhutan is highly dependent for inputs and supplies from sources in India. Moreover, we are making all out efforts to integrate our two economies by taking advantage of the complementaries in the two countries. In view of above, we would like to request you to look into the matter and issue directives to CIL not to impose any export duty on coal sold to Bhutanese companies,? said a recent representation from the government of Bhutan to the commerce ministry.