Updated on Friday, July 03, 2009, 13:26 IST

New Delhi, July 03: The country's largest coal miner, Coal India Ltd, expects the government to exempt its mining labourers from paying tax on housing allowance in the Union Budget, a move which will save Rs 144 crore for the workers in a year.

The company says that such a move will give an option to its non-executive employees "working in difficult conditions" to stay in houses of their choice rather than the government-provided accommodation.

"We expect the government to exempt our employees from paying tax on housing perquisites. On average, every year our non-executive workers pay about Rs 144 crore to the government on account of such tax. Exemption will motivate our employees, working and living in difficult conditions," Coal India Ltd Chairman P S Bhattacharyya told a news agency on the phone.

The company employs about 4.16 lakh people, of whom about 3 lakh non-executive workers stay in government accommodation, he said, adding that the tax outflow on housing stands at about Rs 400 per head per month, which could be done away with. The workers are paid about Rs 15,000 a month.

"For a company which pays around Rs 6,000 crore as corporation tax, it's not a (big thing to ask for). The workers will not be forced to live in the provided accommodation," he added.

When asked if the coal major has recommended the same to its parent ministry, the Chairman declined to comment.

The Coal Ministry has already sought a reduction of import duty on heavy mining equipment to 3 per cent from the present 7-10 percent. This will help Coal India to meet its higher production target for the fiscal.

CIL produced about 403 million tonnes of coal in the last fiscal. The company has a capital expenditure plan of Rs 3,200 crore for this fiscal and aims to increase production by 7.9 percent to 435 million tonnes.

Bureau Report