NTPC, Tata Power, Reliance Power Edge Higher

Shares of Indian power companies NTPC, Power Grid Corp., Tata Power, JSW Energy and Reliance Power were in focus as the revised GST rates on coal kicked in on Monday.

GST Rejig Impact On Coal

One of the key decisions of the GST revamp on India’s energy sector is the removal of the ₹400 per tonne GST Compensation Cess previously levied on coal. At the same time, the GST rate on coal has been increased from 5% to 18%, effectively rationalizing the tax burden across different coal grades.

Under the new structure, coal grades G6 to G17 will see reductions in tax ranging from ₹13.40 per tonne to ₹329.61 per tonne. For the power sector, this translates into an average saving of around ₹260 per tonne, reducing the cost of power generation by 17–18 paise per kWh.

The reforms correct the earlier disproportionate tax incidence, where low-quality coal was taxed far higher than high-quality varieties. For example, G-11 non-coking coal, the most produced by Coal India, previously faced a tax incidence of 65.85% compared to 35.64% for G2 coal. With the cess removed, the uniform tax incidence is now 39.81% across all categories, promoting equity and supporting domestic coal over imports.

Additionally, raising the GST to 18% addresses the inverted duty difference, allowing coal companies to utilize previously blocked input tax credits. This release of liquidity strengthens financial stability and reduces losses from unutilized GST credits.

Stocks Watch

Coal India was up 0.4% on Monday, but retail sentiment shifted to ‘bearish’ from ‘neutral’ a session earlier. Year-to-date, the state-run firm has gained 3%.

Most major power-generating companies were trading higher. NTPC was marginally up by 0.16%, Power Grid Corp. was trading 0.3% higher, Tata Power gained 0.23%, and Reliance Power rose 2.1%. JSW Energy edged 0.34% lower.

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