Coke Oven By-Product Crude Tar + Benzene + Ammonium Sulphate Steel Plant Reconciliation

An integrated steel plant coke oven battery — the plant that carbonises metallurgical coal into coke for downstream blast furnace charge — is not just a primary-product operation. The coke oven battery generates four material by-product streams alongside the primary metallurgical coke output. Crude coal tar at 5 to 8 percent yield against the metallurgical coal charge. Benzene-toluene-xylene (BTX) light oils at 1 to 2 percent. Ammonium sulphate at 1 to 1.5 percent. Coke oven gas at around 300 to 350 cubic metres per tonne of coal charged, consumed internally within the steel plant as fuel for blast furnace stove heating, reheating furnace firing and power plant generation. Each by-product stream carries its own HSN classification, its own GST rate schedule under Notification 1/2017 CT(R) as amended, its own Ind AS 115 revenue recognition point and its own Section 194Q buyer-side profile. The reconciliation discipline that ties the monthly coal charge to the by-product yield register, applies the correct HSN code and output GST rate stream-by-stream, recognises revenue at the point of dispatch or internal consumption per Ind AS 115, values internally-consumed coke oven gas at imputed net realisable value under Ind AS 2 paragraph 14 and tracks Section 194Q applicability on the buyer side is the subject of this coke oven by-product crude tar benzene ammonium sulphate steel plant reconciliation walkthrough.

Quick reference

The reconciliation in one paragraph

An Indian integrated steel plant coke oven battery must capture every tonne of by-product yield against the monthly metallurgical coal charge, apply the correct HSN classification and output GST rate stream-by-stream, recognise revenue at the point of dispatch under Ind AS 115, credit internally-consumed coke oven gas at imputed net realisable value against the joint coal-charge cost of coke under Ind AS 2 paragraph 14, and reconcile the Section 194Q buyer-side TDS credit reflection in Form 26AS for every material buyer counterparty that has crossed the fifty lakh rupees aggregate threshold. The core reconciliation surface is a per-battery-per-month by-product yield ledger keyed on the coke oven battery number, holding the process control system automated coal charging record cross-checked to weighbridge, the by-product yield register per stream (coal tar tonnage from the tar decanting circuit, BTX tonnage from the light-oil distillation column with sub-split into benzene plus toluene plus xylene, ammonium sulphate tonnage from the crystalliser and bagging line, coke oven gas volume in Nm3 metered at the gas holder header), the HSN classification mapping table with the applicable GST rate reference to the current Notification 1/2017 CT(R) position, the by-product sales register with buyer PAN and GSTIN and dispatch reference and transaction price, the Ind AS 115 revenue recognition entry excluding GST output tax, the Ind AS 2 paragraph 14 by-product credit and coke oven gas imputed-value credit, the Section 194Q buyer-side TDS reconciliation with Form 26AS, and the GST output tax deposit reconciliation with GSTR-1 and GSTR-3B filings.

What the scenario looks like — a Bhilai-and-Bokaro coke oven persona

The illustrative persona for this walkthrough is a Tier-1 Indian integrated steel plant coke oven battery of approximately 3.8 million tonnes per annum (MTPA) metallurgical coal charge capacity — the operating footprint typical of the SAIL Bhilai Steel Plant coke oven complex (Chhattisgarh) or the SAIL Bokaro Steel Plant coke oven complex (Jharkhand) or the SAIL Durgapur Steel Plant coke oven complex (West Bengal) or the equivalent battery at Tata Steel Jamshedpur (Jharkhand), Rashtriya Ispat Nigam Vizag (Andhra Pradesh), JSW Vijayanagar (Karnataka), JSPL Angul (Odisha), Tata Steel Kalinganagar (Odisha) or ArcelorMittal Nippon Steel India Hazira (Gujarat). Every one of these integrated steel producers runs a coke oven battery with the four-stream by-product recovery configuration — a tar decanting circuit feeding a crude coal tar storage tank, a coke oven gas washing circuit with wash oil absorption feeding a BTX distillation column, an ammonia scrubbing circuit with sulphuric acid contactor feeding an ammonium sulphate crystalliser and bagging line, and a coke oven gas holder feeding the plant fuel-gas ring main.

The coal input into the coke oven battery is metallurgical (coking) coal — predominantly imported hard coking coal from Australia, USA, Canada, Russia and Mozambique blended with a small proportion of domestic coking coal from the Jharia and Raniganj coalfields. The upstream tax and duty compliance stack on the metallurgical coal charge — Basic Customs Duty 2.5 percent plus Social Welfare Surcharge, IGST 5 percent, Compensation Cess Rs 400 per tonne under the Clean Energy Cess continued regime, and the Notification 9/2022-CT(R) 18 July 2022 blockage of Chapter 27 inverted-duty-structure refund — is the subject of the coking coal import IGST steel plant Chapter 27 Notification 9/2022 reconciliation sibling walkthrough in the Steel Wave 1 cluster. The by-product reconciliation surface documented here sits downstream of that coal-charge-and-input-tax reconciliation, on the same coke oven battery.

The by-product offtake pattern at each of these plants follows a common downstream customer segmentation. Crude coal tar sells to the Indian paint industry (as anti-corrosive coating feedstock) and to independent tar-distillation refineries (Himadri Speciality Chemical, Rain Industries, Epsilon Carbon and others that further distil crude coal tar into naphthalene, anthracene oil, wash oil, phenolic pitch and creosote for onward specialty-chemical use). BTX sells to the Indian chemical industry as petrochemical feedstock (benzene for polystyrene and phenol and aniline production, toluene for toluene diisocyanate and solvents, xylene for xylene isomer production and PET intermediates). Ammonium sulphate sells to Indian fertilizer companies (IFFCO, KRIBHCO, GSFC, RCF, NFL, Coromandel International, Chambal Fertilisers) either as a nitrogenous straight fertiliser or as an input to compound NPK fertilizer blending. Coke oven gas is retained internally as fuel for the coke oven battery under-firing, the blast furnace stoves, the reheating furnace and the captive power plant.

The regulatory overlay — HSN classification, Notification 1/2017 CT(R), Ind AS 115 and Ind AS 2 paragraph 14

Four regulatory anchors govern the by-product reconciliation for a coke oven battery. The Customs Tariff Act 1975 First Schedule prescribes the eight-digit HSN classification for each by-product stream. Notification 1/2017-Central Tax (Rate) as amended prescribes the applicable CGST rate schedule (with matching SGST or IGST). Ind AS 115 governs the revenue recognition on external by-product sales. Ind AS 2 paragraph 14 governs the by-product credit to the joint coal-charge cost of coke production and the treatment of internally-consumed coke oven gas.

On the HSN classification front, crude coal tar falls under HSN 2706 (Tar distilled from coal, from lignite or from peat, and other mineral tars) — Schedule III of Notification 1/2017 CT(R) at 18 percent GST. BTX light oils fall under HSN 2707 (Oils and other products of the distillation of high temperature coal tar) with sub-heading breakdown into benzene HSN 2707 10, toluene HSN 2707 20 and xylene HSN 2707 30 — Schedule III at 18 percent GST across all three sub-headings. Ammonium sulphate for fertilizer use falls under HSN 3102 21 (Mineral or chemical fertilisers, nitrogenous — ammonium sulphate) — Schedule I of Notification 1/2017 CT(R) at 5 percent GST when clearly intended for fertilizer use (the standard offtake position from a coke oven battery to a fertilizer company). The higher 18 percent GST rate applies if the ammonium sulphate is supplied as a technical or chemicals-grade product not for fertilizer use — an uncommon offtake pattern. Coke oven gas is not typically sold externally by an integrated steel plant coke oven battery — where it is (through a dedicated pipeline to a nearby industrial consumer), it falls under HSN 2705 (Coal gas, water gas, producer gas and similar gases) at Schedule I 5 percent GST.

On the Ind AS 115 revenue recognition front, revenue on a by-product sale is recognised at the point in time when control of the by-product transfers to the customer per paragraph 31 read with paragraph 38 — typically the point of dispatch from the plant gate for road tanker or truck movement, or the point of loading onto rail wagon for rail dispatch. The transaction price under paragraph 47 through 72 excludes GST output tax (collected on behalf of the Government) and includes any variable consideration such as quality-linked price adjustments recognised at the expected value or most likely amount per paragraph 53.

On the Ind AS 2 paragraph 14 front, when a joint production process yields a main product and by-products, the entity allocates joint costs between the products on a rational and consistent basis. Where the by-products are by their nature immaterial, they are often measured at net realisable value (NRV) and this value is deducted from the cost of the main product. For a coke oven battery, this paragraph anchors the treatment of the four by-product streams — the NRV of crude coal tar, BTX, ammonium sulphate and (imputed) coke oven gas is credited against the joint coal-charge cost of coke, so that the coke landed cost per tonne into the blast furnace burden reflects the net cost after by-product credit. The parallel by-product story downstream of the coke oven battery is the blast furnace slag — a molten by-product of the blast furnace itself that is granulated and sold to the cement industry as ground granulated blast furnace slag (GGBS) for blending into Portland Slag Cement (PSC). The reconciliation mechanic for that inter-industry supply — steel plant selling slag to cement plant — is documented in the slag steel mill to cement blending PSC inter-industry supply reconciliation walkthrough. Between the coke oven by-product recovery and the blast furnace slag by-product monetisation, an integrated steel plant runs two distinct by-product franchises that materially contribute to the plant profitability.

Section 194Q of the Income-tax Act 1961 sits parallel to the GST and Ind AS stack. On the buyer side of any material by-product sale — paint industry, tar-distillation refinery, chemical industry, fertilizer company — the buyer aggregates its cumulative purchase from the steel plant’s PAN across the previous year; once the aggregate crosses fifty lakh rupees, the buyer is required to deduct 0.1 percent TDS on the incremental purchase over the threshold at the point of credit or payment whichever is earlier. The steel plant seller receives credit for the TDS in its Form 26AS as buyer-deposited TDS against its PAN, and the Section 393 payment code finder is the operational lookup for the correct TDS payment code applied by the buyer.

A worked example — a 3.8 MTPA coal-charge coke oven battery FY 2026-27 by-product position

Illustrative — the following figures represent the operating pattern of a Tier-1 Indian integrated steel plant coke oven battery of approximately 3.8 MTPA metallurgical coal charge capacity, in the mould of a SAIL Bhilai or Bokaro or Durgapur coke oven complex. Public disclosures by listed Indian integrated steel producers do not reveal per-battery per-year by-product yield quantum or transaction price band in the granularity below; cross-verify against the current CBIC notification schedule for the applicable GST rate for the effective date of supply and against your own coke oven battery process control system and by-product sales ledger before action. The unit prices used below (Rs 35 per kg for crude coal tar, Rs 70 per kg for BTX-average, Rs 15 per kg for ammonium sulphate) are illustrative reference points within the typical price band and do not represent the actual realised price for any specific operating year or specific by-product buyer contract.

The illustrative coke oven battery closes its FY 2026-27 by-product yield position across 12 months of steady 3.8 MTPA metallurgical coal charge. The annual by-product yield register aggregates as follows:

On the GST output-tax front, the crude coal tar external sale of Rs 931 crore attracts 18 percent GST under HSN 2706 Schedule III — output GST of Rs 167.58 crore for the year, split between CGST plus SGST for intra-Chhattisgarh supplies (paint industry buyers in and around Bhilai and Raipur) and IGST for inter-State dispatches (paint industry and tar-distillation buyers in Maharashtra, Gujarat, Tamil Nadu, West Bengal). The BTX external sale of Rs 399 crore attracts 18 percent GST under HSN 2707 Schedule III — output GST of Rs 71.82 crore for the year, largely IGST given that BTX customer concentration sits with the petrochemical industry in Gujarat, Maharashtra and Tamil Nadu. The ammonium sulphate external sale of Rs 68.4 crore attracts 5 percent GST under HSN 3102 21 Schedule I as fertilizer supply — output GST of Rs 3.42 crore for the year, largely IGST given that the fertilizer company buyers are spread across all major fertiliser manufacturing States. Total annual output GST across the three external by-product streams is approximately Rs 242.82 crore. The internally-consumed coke oven gas at 180 million Nm3 per year does not attract GST output tax (no external supply).

On the Ind AS 115 revenue recognition front, the external sale by-product revenue of Rs 1,398 crore is recognised at the point of dispatch from the coke oven battery gate across the twelve months of the financial year, excluding the Rs 242.82 crore GST output tax (collected on behalf of the Government). The Rs 220 crore imputed value of the internally-consumed coke oven gas is not a customer sale and does not attract Ind AS 115 revenue recognition.

On the Ind AS 2 paragraph 14 front, the total by-product realisation including imputed coke oven gas of Rs 1,618 crore is credited against the joint coal-charge cost of coke production. If the metallurgical coal cost for the year runs at (say) an illustrative Rs 22,000 per tonne landed at the coke oven battery (mid-cycle imported Australian hard coking coal reference) times 3.8 million tonnes charged, the gross coal cost aggregates to Rs 8,360 crore. The Rs 1,618 crore by-product credit reduces the net coal cost to Rs 6,742 crore, and this net coal cost anchors the coke landed cost per tonne into the blast furnace burden after conversion cost, energy cost, refractory maintenance and depreciation are layered on. The coke landed cost reduction from the by-product credit is a material profitability driver for the integrated steel plant — a Rs 1,618 crore credit against a Rs 8,360 crore gross coal cost is a 19 percent absolute reduction in the coal cost line item, directly reflected in the crude steel unit cost.

On the Section 194Q buyer-side front, several material paint industry and tar-distillation refinery buyers, chemical industry BTX buyers and fertilizer company ammonium sulphate buyers will cross the fifty lakh rupees aggregate threshold within the first quarter of the financial year. The buyer deducts 0.1 percent TDS on the incremental purchase over the threshold at the point of credit or payment, and the steel plant seller reconciles the TDS credit reflection in its Form 26AS against its own by-product sales ledger monthly. Any variance is escalated to the buyer’s finance team for correction before the quarterly Form 26AS lock-in. The reconciliation playbook for monthly close framework provides the standing month-end control cadence for this Section 194Q buyer-side reconciliation.

Common reconciliation breakages

Five breakages recur across Indian integrated steel plant coke oven by-product franchises, and each maps to a specific control failure that a statutory auditor, a GST officer or an Income-tax Officer under Section 194Q will surface.

The process control system by-product yield does not reconcile to the physical inventory yield. The tar decanting circuit meter reads (say) 22,500 tonnes of crude coal tar produced in the month, but the crude coal tar storage tank physical stock movement (opening stock plus production minus dispatches minus closing stock) reconciles to 22,150 tonnes — a 350-tonne variance driven by tank calibration drift, water content variation in the crude tar, tar leakage in the transfer piping or storage tank vapour loss. Any variance above the plant’s tolerance threshold (typically 0.5 to 1.0 percent) must be investigated, root-caused and either adjusted to the physical inventory position with an inventory revaluation entry or, if a real process loss, expensed to the by-product cost of production.

The HSN classification and GST rate applied on the by-product sales invoice does not match the current CBIC notification position. A common breakage is that the ammonium sulphate sale to a fertilizer company is invoiced at the fertilizer-grade 5 percent GST rate under HSN 3102 21 Schedule I, but the physical dispatch documentation does not carry the buyer’s declaration or the offtake contract clause confirming fertilizer use — the GST officer on assessment can re-classify the supply to Schedule III at 18 percent GST, resulting in a differential GST demand plus interest under Section 50 of the CGST Act 2017.

The Ind AS 115 revenue recognition timing on a by-product sale is off. A common breakage is that the sale invoice is booked at end-of-month cutoff, but the physical dispatch of the by-product from the plant gate happens on the first of the following month. Under Ind AS 115 paragraph 31 read with paragraph 38, revenue must be recognised when control transfers — at the point of dispatch — not at the point of invoice booking. The month-end revenue cut-off must align to the physical dispatch date, not the invoice date. A parallel breakage is that the transaction price includes GST output tax (which must be excluded from revenue per paragraph 47) — the revenue is inflated by the GST component and the corresponding output-tax-payable liability is understated.

The coke oven gas imputed value credit against the joint coal cost uses a stale or unsupported NRV benchmark. The plant’s cost accounting policy may benchmark coke oven gas imputed value to (say) natural gas at Rs 30 per Nm3 equivalent, but the current natural gas price at Rs 45 per Nm3 warrants a benchmark refresh. The stale benchmark understates the by-product credit and overstates the net coke cost, mis-stating the crude steel unit cost calculation for management reporting and standard costing variance analysis.

The Section 194Q buyer-side TDS reflection in Form 26AS does not match the plant’s own by-product sales ledger. A common breakage is that a paint industry buyer deducts 0.1 percent TDS on the crude coal tar purchase but deposits the TDS against a wrong PAN in the buyer’s TDS return, so the credit does not reflect in the steel plant’s Form 26AS. The month-end Form 26AS reconciliation must surface the missing credit for follow-up with the buyer’s finance team before the quarterly TDS return lock-in. The reconciliation failure mode analysis methodology anchors the design of the reconciliation controls for each of these breakages.

How a reconciliation platform handles this

A purpose-built reconciliation platform for a steel plant coke oven by-product franchise reads the process control system automated coal charging record, the by-product yield register per stream (tar decanting, BTX distillation column, ammonium sulphate crystalliser and bagging line, coke oven gas holder metering), the physical inventory movement register per storage tank and bagging line, the by-product sales invoice register with buyer PAN and GSTIN and HSN and GST rate, the GSTR-1 filing extract, the GSTR-3B deposit position, the Form 26AS Section 194Q buyer-side TDS credits and the ERP by-product revenue and joint-cost-credit journal entries. It ties these signal streams together against the coke oven battery master and the by-product HSN classification mapping table, and produces a month-end variance report — process control yield versus physical inventory yield, invoice HSN and GST rate versus current CBIC notification position, revenue recognition timing versus physical dispatch date, coke oven gas imputed value benchmark versus current natural-gas market position, Form 26AS TDS credit versus by-product sales ledger — each variance categorised, root-caused, and routed to the plant CFO, the mines-to-steel process controller and the statutory auditor. For every Tier-1 and Tier-2 Indian integrated steel producer with a coke oven battery footprint, this by-product reconciliation is a standing month-end control that Terra Insight’s steel reconciliation software India surface is engineered to deliver at production scale across multi-battery, multi-plant, multi-buyer geographies.

Terra Insight Editorial Team Reconciliation Infrastructure

Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →

Published 28 July 2026

Domain expertise

TDS Reconciliation GST Input Credit Platform Settlements NACH Batch Matching Bank Reconciliation Form 26AS Matching ERP Integrations Enterprise Finance Ops

Reviewed by

NK

Navin Krishnan

Managing Director & Founder — Terra Insight

Ex Amazon India · Intuit QuickBooks · Tata nexarc

ISO 27001:2022 Patent Pending Incorporated 2024