The Hindu Business Line : Proposal on dividend tax: Coal India sees Rs 200-cr gain

Kolkata, March 1 Elimination of the scope of double taxation on corporate dividends would help Coal India Ltd (CIL) to net a clear Rs 200 crore beginning fiscal year 2008-09.

CIL has seven coal producing subsidiaries contributing to the parent’s profits through payment of dividend. CIL, in turn, pays dividend to the Union Government.

The coal major posted a profit of Rs 8,212 crore in 2006-07, and is expected to cross the Rs 7,000-crore mark this fiscal.

“We were losing Rs 200 core due to double taxation of dividends paid by subsidiaries to us and again on our payments to the Centre. Today’s Budget proposal finally removes this anomaly helping us to net Rs 200 crore in the future,” Mr Partha Bhattacharya, Chairman, CIL, told Business Line.

Coal regulator

Mr Bhattacharya welcomed the Centre’s move of appointing a coal regulator in view of increasing private mining activities.

“We expect the regulator to create a level-playing field between private and public sector by preventing under pricing of coal; terms and conditions for pay and most importantly wages and environment and social sustainability of mining activities,” he said.

“Correct pricing of coal as well as identical social and environmental sustainability conditions for private and public sector will help CIL to engage into more underground mining activity,” he added.

Interestingly, the company will benefit from the tax holiday granted on setting up hospitals in remote areas.

More Stories on : Dividend Announcement | Coal | Budget

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