Coking Coal Import IGST for Steel Plant Chapter 27 Notification 9/2022 Reconciliation

A Tier-1 Indian integrated steel producer running a Jharkhand blast-furnace-and-coke-oven plant in the Jamshedpur cluster or an Odisha coastal plant in the Angul or Kalinganagar cluster lifts predominantly Australian metallurgical coking coal supplemented by US Appalachian, Mozambique Moatize and Russian Kuznetsk material as the primary reductant for the blast furnace steel-making route — an illustrative combined annual coking coal import volume in the 7 to 10 million tonne per annum band per flagship integrated plant footprint, blended CIF pricing typically in the USD 145 to 185 per tonne band depending on origin, coal quality (premium hard coking coal, semi-soft, PCI grade), sulphur specification and shipping window — and books the coking coal against a customs duty stack that layers a Basic Customs Duty at 2.5 percent under sub-heading 2701 12 of the First Schedule to the Customs Tariff Act 1975, a Social Welfare Surcharge at 10 percent on the BCD under Section 110 of the Finance Act 2018, an Integrated Goods and Services Tax at 5 percent under Section 3(7) of the Customs Tariff Act 1975 read with Notification 01/2017-Integrated Tax (Rate), and a GST Compensation Cess at a flat Rs 400 per tonne under the Goods and Services Tax (Compensation to States) Act 2017 read with Notification 01/2017-Compensation Cess (Rate). The 5 percent IGST at import is available as input tax credit for utilisation against the 18 percent output GST on finished steel of Chapter 72 under Notification 01/2017-Central Tax (Rate) Schedule III entries, and the Rule 89(5) inverted-duty refund route that would ordinarily catch any accumulated unutilised ITC in edge tax periods was closed by Notification No. 09/2022-Central Tax (Rate) dated 18 July 2022, which amended Notification 05/2017-CT(R) to insert the entire Chapter 27 fuel basket (coal, lignite, peat, coke and petroleum coke) into the schedule of supplies where no refund of unutilised input tax credit shall be allowed under the second proviso to Section 54(3) of the Central Goods and Services Tax Act 2017. The Rs 400 per tonne Compensation Cess sits separately — because finished steel of Chapter 72 is not a notified cessable output, the cess ITC accumulated on the coking coal input has no output tax against which to be utilised in any tax period and becomes a permanent stuck credit that is loaded into the Ind AS 2 landed cost of coking coal and flows through the coke, hot metal and finished steel inventory books. The reconciliation discipline that ties every bill of entry to the IGST-paid register, the Compensation Cess register, the GSTR-2B auto-populated import entry, the GSTR-3B Table 4A(1) ITC availment, the electronic credit ledger utilisation against output steel GST, the compensation cess stuck-credit ledger position and the Notification 09/2022 refund-blocked flag, all threaded through the Ind AS 2 landed-cost computation for the coking coal, coke, hot metal and finished steel inventory books, is the subject of this coking coal import IGST steel plant Chapter 27 Notification 9/2022 walkthrough.

Quick reference

The reconciliation in one paragraph

A Tier-1 or Tier-2 Indian integrated steel producer operating a blast-furnace-and-coke-oven plant with a captive coke oven battery and downstream blast furnace, basic oxygen furnace and hot strip mill footprint must capture every rupee of the four-layer coking coal import duty stack — Basic Customs Duty plus Social Welfare Surcharge plus IGST plus GST Compensation Cess at Rs 400 per tonne — against every bill of entry filed with the Indian customs authority, tie the IGST amount to the GSTR-2B auto-populated import entry and the GSTR-3B Table 4A(1) input tax credit claim, tie the Compensation Cess amount to the parallel compensation cess statement in GSTR-2B and the compensation cess electronic credit ledger, hold the Notification 09/2022 refund-blocked flag on the Chapter 27 portion in the standing per-tax-period inverted-duty-structure computation, and thread the CIF plus BCD plus SWS plus Rs 400 per tonne Compensation Cess plus port-handling plus inland-freight into the Ind AS 2 landed cost of the coking coal input rolling through the coke oven conversion into coke inventory and through the blast furnace charging into hot metal and finished steel inventory carrying value under the weighted-average cost formula. The core reconciliation surface is a per-consignment bill-of-entry register keyed on the bill-of-entry number, holding the customs port and origin country, the assessable value in Indian rupees, the BCD-SWS-IGST-Cess amounts, the customs exchange rate applied, the GSTR-2B match for the tax period, the GSTR-3B claim reference, the electronic credit ledger movement for the IGST portion, the compensation cess ledger movement for the cess portion (with the standing stuck-credit memo note), the Notification 09/2022 refund-blocked flag and the Ind AS 2 landed cost per tonne loaded to the coking coal inventory book. Every material deviation between bill-of-entry amount and GSTR-2B amount, between IGST claim and electronic credit ledger movement, between compensation cess amount and cess ledger balance, or between landed cost per tonne and the coke conversion cost roll-through into the coke inventory book is flagged as a month-end break for the plant CFO, the taxation head and the mines-and-materials head, with escalation to the statutory auditor and to the Chief Commissioner (Customs) post-clearance audit team where the deviation crosses the materiality threshold.

What the scenario looks like in India — a Jamshedpur and Kalinganagar coking coal import persona

The illustrative persona for this walkthrough is a Tier-1 Indian integrated steel producer operating a combined 20 million tonnes per annum crude steel capacity across a flagship Jharkhand plant at Jamshedpur (blast furnace plus BOF route, 11 MTPA) and an Odisha coastal plant at Kalinganagar (blast furnace plus BOF route, 8 MTPA plus 3 MTPA expansion), fed by a combined annual coking coal import lift of 8.5 million tonnes per annum across the two-plant footprint at a blended CIF of approximately USD 165 per tonne (blended across Australia at USD 170 per tonne for 5.2 million tonnes, USA at USD 155 per tonne for 1.8 million tonnes, Mozambique at USD 145 per tonne for 0.9 million tonnes and Russia at USD 130 per tonne for 0.6 million tonnes). The blended CIF translates to approximately Rs 11,600 crore of imported coking coal per year at an INR-USD rate of Rs 83. The Australian material lands at Paradip port and Dhamra port for the Odisha plant and moves inland by rail to the coke oven battery; the US Appalachian material lands at Krishnapatnam and Visakhapatnam for the JSPL Angul (illustrative parallel plant persona) footprint; the Mozambique material lands at Gangavaram; the Russian material lands at Haldia. The receipt-to-consumption cycle typically runs 30 to 60 days from vessel discharge to coke oven charging.

Illustrative Tier-1 and Tier-2 Indian integrated steel producers operating blast-furnace-and-coke-oven plants running the same coking coal import compliance stack include Steel Authority of India Ltd (SAIL — Bokaro, Bhilai, Durgapur, Rourkela and Burnpur plants), JSW Steel (Vijayanagar, Dolvi and Salem plants), Tata Steel (Jamshedpur and Kalinganagar plants), Jindal Steel and Power Ltd (JSPL — Raigarh and Angul plants), Rashtriya Ispat Nigam Ltd (RINL — Vizag Steel plant), ArcelorMittal Nippon Steel India (AMNS — Hazira plant), Bhushan Power and Steel (BPSL under JSW — Sambalpur plant), Jindal Stainless (Jajpur) for stainless steel and Kalyani Steel (Ginigera) for specialty. Every one of these producers has lifted imported coking coal against the Rs 400 per tonne Compensation Cess plus the 5 percent IGST plus the BCD-and-SWS stack for years, and the reconciliation discipline documented here is the standing month-end close mechanic for any integrated steel plant with a coking-coal-import-dependent blast-furnace-and-coke-oven footprint. The DRI-EAF specialty-steel and stainless-steel producers running electric-arc-furnace routes do not consume coking coal at material scale (their reductant is natural gas or non-coking coal for DRI plus scrap steel for EAF) — this cornerstone applies specifically to the blast-furnace-and-coke-oven integrated route.

The regulatory overlay — Notification 09/2022-CT(R), Compensation Cess Act, Chapter 27 tariff and Ind AS 2

Five regulatory anchors govern an integrated steel plant’s coking coal import reconciliation. Notification No. 09/2022-Central Tax (Rate) dated 18 July 2022 amends Notification 05/2017-CT(R) to close the Rule 89(5) inverted-duty refund route for the entire Chapter 27 fuel basket. The Customs Tariff Act 1975 First Schedule Chapter 27 Heading 2701 sub-heading 2701 12 anchors the BCD-and-SWS mechanic. Section 3(7) of the Customs Tariff Act 1975 read with Notification 01/2017-Integrated Tax (Rate) anchors the 5 percent IGST at import. The Goods and Services Tax (Compensation to States) Act 2017 read with Notification 01/2017-Compensation Cess (Rate) anchors the Rs 400 per tonne Compensation Cess. Ind AS 2 (Companies (Indian Accounting Standards) Rules 2015) governs the landed-cost treatment of the non-recoverable import duty portions flowing into the coking coal, coke, hot metal and finished steel inventory books.

Notification 09/2022-CT(R) dated 18 July 2022 uses the second-proviso authority under Section 54(3) of the Central Goods and Services Tax Act 2017 to notify supplies where no refund of unutilised input tax credit shall be allowed. The inserted entries cover the entire Chapter 27 fuel basket — coal (2701) including coking coal (2701 12), lignite (2702), peat (2703), coke and semi-coke (2704) and petroleum coke (2708). For an integrated steel plant, the 5 percent IGST on coking coal against the 18 percent output GST on finished steel of Chapter 72 is a forward duty structure in the normal case (output rate exceeds input rate), so the Rule 89(5) inverted-duty refund would not ordinarily arise on the coking coal input in a routine tax period. The refund bar becomes materially relevant in edge tax periods where the plant has heavy export dispatch under Letter of Undertaking (zero-rated output with no domestic output tax accrual), where a plant shutdown coincides with a large coking coal lift, or where the tax-period product mix skews toward exports. In those tax periods the 5 percent IGST on coking coal that cannot be utilised against domestic output GST sits as a permanent electronic-credit-ledger carry under the Chapter 27 refund bar. The Cement Wave 1 sibling walkthrough at pet-coke import IGST cement plant Chapter 27 Notification 9/2022 reconciliation documents the identical refund-bar mechanic for the cement pet-coke side, and the Chemicals Wave 1 sibling at Chapter 27 IDS refund bar Notification 9/2022 chemicals documents the parallel situation for the petrochemical refinery downstream side.

The Customs Tariff Act 1975 First Schedule classifies coking coal under Heading 2701 sub-heading 2701 12 covering bituminous coal (whether or not pulverised, but not agglomerated). The BCD rate is 2.5 percent ad valorem on the assessable value determined under Section 14 of the Customs Act 1962 (typically CIF plus a 1 percent landing charge). The SWS under Section 110 of the Finance Act 2018 applies at 10 percent on the BCD, giving a net effective SWS of 0.25 percent on the CIF. Both BCD and SWS are always non-recoverable and always form part of the Ind AS 2 landed cost of the coking coal input.

Section 3(7) of the Customs Tariff Act 1975 read with Notification 01/2017-Integrated Tax (Rate) dated 28 June 2017 (as amended) prescribes the IGST rate for coking coal under Heading 2701 at 5 percent under Schedule I. The IGST is levied on the assessable value plus BCD plus SWS. The IGST paid on import is available as input tax credit under Section 16 of the Central Goods and Services Tax Act 2017 subject to the standard eligibility conditions and the Section 17(5) blocked-credit list — coking coal for kiln and blast furnace consumption is fully eligible ITC.

The Goods and Services Tax (Compensation to States) Act 2017 read with Notification 01/2017-Compensation Cess (Rate) dated 28 June 2017 (as amended) prescribes the Compensation Cess at Rs 400 per tonne (flat, not ad valorem) on coal under Heading 2701 — applicable equally to coking coal, thermal coal and other coal under sub-headings 2701 11, 2701 12 and 2701 19, whether imported or domestically procured. The cess absorbed the pre-GST Clean Energy Cess on coal originally introduced by the Finance Act 2010 and continued the Rs 400 per tonne rate. Section 11 of the Compensation Cess Act provides that the input tax credit of Compensation Cess can be utilised only for payment of Compensation Cess and cannot be utilised for payment of CGST, SGST or IGST. Because finished steel of Chapter 72 is not on the notified cessable output list, the cess ITC becomes a permanent stuck credit in the compensation cess electronic credit ledger with no utilisation route.

Ind AS 2 paragraph 11 requires the cost of inventories to include import duties and other taxes other than those subsequently recoverable by the entity from the taxing authorities. The BCD plus SWS plus Compensation Cess portions are always loaded into the coking coal landed cost as non-recoverable taxes. The IGST portion is excluded from the landed cost when ITC utilisation against the 18 percent steel output GST is full and timely — the normal case for a domestic-output-heavy integrated steel plant — and loaded into the landed cost only in edge tax periods where a residual carry persists in the electronic credit ledger.

A worked example — Jamshedpur and Kalinganagar coking coal import FY 2026-27

Illustrative — the following figures represent the operating pattern of a Tier-1 Indian integrated steel producer operating a combined 20 MTPA crude steel footprint across a Jharkhand blast-furnace plant and an Odisha coastal blast-furnace plant with an 8.5 million tonne per annum blended coking coal import lift. Public disclosures by listed Indian steel majors do not reveal per-consignment coking coal landed cost and Compensation Cess accumulation in the granularity below; cross-verify against the current customs tariff schedule, the current Notification 01/2017-Compensation Cess (Rate) and your own bill-of-entry register before action. The USD 165 per tonne blended CIF and the Rs 83 per USD customs exchange rate used below are illustrative reference points and do not represent the actual current market coking coal price or the actual current customs exchange rate for any specific operating year.

The annualised FY 2026-27 coking coal import picture for the combined Jamshedpur-and-Kalinganagar persona is:

On the IGST utilisation dimension, the Rs 601 crore per year of IGST paid at import flows into the electronic credit ledger and is utilised against the 18 percent output GST on the plant’s finished steel dispatches. At an illustrative 20 MTPA crude steel output at an average weighted realisation of Rs 55,000 per tonne, the annual output steel value is Rs 110,000 crore and the annual output GST at 18 percent is Rs 19,800 crore. The Rs 601 crore of import IGST on coking coal is a routine 3 percent of the annual output GST and is fully utilised in the normal course. Any tax period with a heavy export dispatch under LUT skew (export dispatch typically 20 to 30 percent of total dispatch for a major integrated steel producer) creates a temporarily elevated ITC balance where the coking coal IGST participates — but the Chapter 27 refund bar under Notification 09/2022 means any accumulated portion attributable to coking coal cannot be refunded and sits as a working-capital carry until absorbed by future domestic output tax.

On the Compensation Cess dimension, the Rs 340 crore per year of Compensation Cess paid at import on the 8.5 million tonnes flows into the compensation cess electronic credit ledger — and stays there. Because finished steel of Chapter 72 is not a notified cessable output under Notification 01/2017-Compensation Cess (Rate), no output cess accrues against which the ITC can be utilised. The Rs 340 crore per year of cess ITC accumulates as a permanent stuck credit in the compensation cess ledger, and the prevailing Ind AS 2 treatment is to load the entire Rs 400 per tonne into the coking coal landed cost as an import tax that is not subsequently recoverable. Over a five-year period the cumulative stuck cess credit on this scale is Rs 1,700 crore — a material working-capital and cost-of-production line item that the CFO must reflect in the annual cost-management note to the financial statements.

On the Ind AS 2 dimension, the per-tonne landed cost of coking coal at the coke oven battery stacks as follows: CIF Rs 13,695 per tonne, BCD Rs 346 per tonne, SWS Rs 35 per tonne, non-recoverable IGST portion nil per tonne (assuming full ITC utilisation against 18 percent output steel GST), Compensation Cess Rs 400 per tonne, port handling Rs 200 per tonne, inland freight to coke oven Rs 400 per tonne — aggregating to a landed cost of Rs 15,076 per tonne of coking coal at the coke oven charging window. This per-tonne cost flows into the coke oven conversion, and at the industry-standard 72 to 78 percent coal-to-coke yield (illustrative 75 percent, meaning approximately 1.33 tonnes coking coal per tonne of coke), the coking coal cost loading per tonne of coke is Rs 20,101. Adding coke oven conversion costs (energy, refractories, wages, depreciation) of an illustrative Rs 4,000 per tonne of coke takes the fully-loaded coke landed cost to Rs 24,101 per tonne. At the blast furnace, the coke charging rate of approximately 450 kg per tonne of hot metal loads Rs 10,845 per tonne of hot metal from coke alone — before adding iron ore, sinter, pellets, fluxes and other burden materials.

Common reconciliation breakages

Five breakages recur across Indian integrated steel producers running the coking-coal-import-plus-IGST-plus-Compensation-Cess reconciliation stack, and each maps to a specific control failure that a statutory auditor reviewing Ind AS 2 inventory valuation, a tax auditor reviewing Section 16 ITC eligibility, a GST department review of the electronic credit ledger, or a Chief Commissioner (Customs) post-clearance audit will surface.

• Bill-of-entry-to-GSTR-2B import entry mismatch on the IGST or Compensation Cess amount. The ICEGATE-to-GSTR-2B integration under Notification 06/2022-Central Tax dated 17 May 2022 auto-populates the import-of-goods entry into GSTR-2B including both the IGST amount and the Compensation Cess amount. Timing gaps between the bill-of-entry filing date and the GSTR-2B generation date can produce a shift of an import entry from one tax period to the next, an ICEGATE-to-GSTR-2B population lag can produce a temporary mismatch in amount, or a bill-of-entry amendment (reassessment on the customs side) can create a difference between the amount on the original bill of entry and the amount populated into GSTR-2B. The result is an under-claimed or over-claimed ITC in the GSTR-3B for the tax period. Reconciliation discipline: the per-consignment bill-of-entry register is reconciled to the GSTR-2B import-of-goods statement for every tax period, with any amount mismatch above a materiality threshold (illustrative Rs 25,000 per consignment) flagged for the taxation head investigation and correction through the GSTR-3B amendment window in the following tax period.

• Compensation Cess ITC availed and mis-routed to the IGST or CGST utilisation queue. A treasury or GST-compliance clerk unfamiliar with the Section 11 restriction under the Compensation Cess Act — “the input tax credit of Compensation Cess can be utilised only for payment of Compensation Cess” — may attempt to utilise the Rs 400 per tonne cess ITC against the 18 percent output steel GST in the GSTR-3B utilisation queue. The GSTN system enforces the restriction and rejects the utilisation, but the failed attempt can trigger a manual override attempt or a reclassification of the cess as an IGST refund claim under Form GST RFD-01 — both of which are misapplications of law. Reconciliation discipline: the compensation cess electronic credit ledger is maintained separately from the IGST-CGST-SGST electronic credit ledger, the utilisation queue in the monthly GSTR-3B closing exercise is explicitly parameterised to exclude the compensation cess balance from the IGST-CGST-SGST utilisation logic, and the compensation cess stuck-credit balance is carried forward as a running memo item with a standing narrative note that finished steel is not a cessable output. Terra Insight’s reconciliation failure mode analysis for India design pillar frames the accounting-treatment-master-driven-computation discipline that surfaces this failure at the utilisation-parameter stage rather than at the GSTN rejection stage.

• Notification 09/2022 refund-blocked flag not applied — refund application filed on the Chapter 27 portion of accumulated ITC. In an edge tax period with heavy export dispatch under LUT that leaves an accumulated IGST balance in the electronic credit ledger, a compliance clerk may file a Form GST RFD-01 refund application on the entire accumulated balance including the Chapter 27 portion attributable to coking coal ITC. The refund would be rejected by the GST department on the Chapter 27 portion under Notification 09/2022-CT(R), with the risk of a broader inquiry into the plant’s Chapter 27 refund position for prior tax periods. Reconciliation discipline: the standing per-tax-period inverted-duty-structure computation workbook holds the Chapter 27 refund-blocked flag as a compulsory input parameter, the Chapter 27 attributable ITC (coking coal, non-coking coal, coke, pet-coke and other Chapter 27 fuel inputs) is separately segmented from the non-Chapter-27 attributable ITC, and any Form GST RFD-01 refund application is filed only on the non-Chapter-27 portion with the Chapter 27 portion carried forward as a permanent working-capital line under the notification.

• Ind AS 2 landed cost loading incomplete — Compensation Cess captured but IGST or BCD-and-SWS treatment inconsistent across tax periods. A common inventory valuation failure is inconsistent Ind AS 2 loading across the four duty layers — the BCD and SWS are always loaded as non-recoverable, but the IGST loading depends on ITC utilisation position and can flip between tax periods depending on the domestic-versus-export dispatch mix, and the Compensation Cess is always loaded as non-recoverable. A clerk who mechanically loads all four layers in every tax period over-values the inventory in tax periods with full IGST utilisation; a clerk who mechanically excludes IGST in every tax period under-values the inventory in tax periods with a residual carry. Reconciliation discipline: the Ind AS 2 inventory valuation policy note documents the explicit two-branch IGST loading rule (excluded when full utilisation, loaded when residual carry persists beyond a defined utilisation-horizon threshold), the compensation cess is always loaded, and the loading logic is executed off the tax-period-wise electronic credit ledger utilisation position rather than mechanically applied. The reconciliation playbook for monthly close India operations pillar frames the monthly-close cadence discipline for the two-branch IGST loading test.

• Coke oven conversion cost roll-through miscalculated — coal-to-coke yield assumption stale or blast furnace coke rate not synchronised. The coking coal landed cost per tonne must be rolled through the coke oven conversion into the coke inventory carrying value at the plant’s actual coal-to-coke yield (industry benchmark 72 to 78 percent, with plant-specific variation driven by the coal blend composition, the coke oven battery age and the operating temperature profile), and further rolled through the blast furnace charging into the hot metal inventory at the plant’s actual coke rate (industry benchmark approximately 450 kg per tonne of hot metal, with plant-specific variation driven by the sinter-to-pellet ratio, the blast furnace productivity profile and the alternative reductant injection like pulverised coal injection). A stale yield assumption of 78 percent when actual is 74 percent under-loads the coke inventory by approximately 5 percent, and cumulatively distorts the hot metal and finished steel inventory carrying value over the year. Reconciliation discipline: monthly reconciliation between actual coking coal consumption from the coke oven charging register and actual coke output from the coke oven pushing register (yield check), monthly reconciliation between actual coke consumption from the blast furnace charging register and actual hot metal production from the tap-hole register (coke rate check), and quarterly reassessment of the standard yield and coke rate assumptions used in the Ind AS 2 roll-through calculation. The seven-family human-error taxonomy that surfaces the yield-and-rate-assumption-drift gap sits in the human errors detection envelope anchor.

How a reconciliation platform handles this

A purpose-built steel reconciliation platform ingests every bill of entry filed with the Indian customs authority for coking coal import against the plant’s ICEGATE-registered IEC, every GSTR-2B auto-populated import-of-goods entry for the tax period (IGST amount and Compensation Cess amount separately), every GSTR-3B Table 4A(1) IGST ITC availment, every compensation cess electronic credit ledger movement, every domestic output GST liability against which the IGST portion is utilised, and every per-consignment inventory receipt entry loading the CIF plus BCD plus SWS plus non-recoverable IGST portion (typically nil) plus Rs 400 per tonne Compensation Cess plus port-handling plus inland-freight into the Ind AS 2 landed cost of the coking coal input book. The platform tags each entry at capture with the applicable Chapter 27 refund-bar flag (Notification 09/2022 blocked), the Compensation Cess stuck-credit flag (steel is not cessable output — permanent Ind AS 2 loading), the coke oven yield tag (plant-specific standard yield with a monthly actual-versus-standard variance measurement) and the blast furnace coke rate tag (plant-specific standard rate with a monthly actual-versus-standard variance measurement). Standing dashboard controls surface any bill-of-entry-to-GSTR-2B amount mismatch above the materiality threshold, any compensation cess utilisation attempt against non-cess output liabilities, any inverted-duty-structure Form RFD-01 refund application filed on the Chapter 27 portion of accumulated ITC, any Ind AS 2 landed cost loading inconsistency across tax periods and any coke oven yield or blast furnace coke rate drift beyond the monthly variance envelope. Match-rate improvement of 51 to 88 percent on the bill-of-entry-to-GSTR-2B reconciliation and on the IGST-availment-to-utilisation reconciliation, combined with an ISO 27001:2022 posture and DPDP Act 2023 aligned data handling for regulator-facing customs and GST submissions, is what makes the platform an infrastructure investment for a Tier-1 or Tier-2 Indian integrated steel producer operating a multi-plant coking-coal-import-dependent blast-furnace-and-coke-oven footprint against the Chapter 27 refund bar and the Compensation Cess stuck-credit mechanic — rather than a spreadsheet substitute that leaves the four-layer duty stack reconciliation, the Chapter 27 refund-block application, the compensation cess stuck-credit tracking and the Ind AS 2 landed-cost roll-through into coke and hot metal inventory as manual overheads on a hybrid customs-plus-GST-plus-plant-finance team. The commercial pillar for the steel sub-cluster is steel reconciliation software India; the broader authority for the platform is reconciliation software India.

Cross-cluster bridges and where to read next

The coking coal import IGST plus Compensation Cess reconciliation mechanic documented here anchors the Steel Wave 1 Theme 2 fuel-import-and-cess series. The sibling walkthrough at non-coking coal CIL FSA steel plant TDS Section 194Q reconciliation covers the parallel domestic non-coking coal procurement mechanic under the Coal India Ltd Fuel Supply Agreement route with the Section 194Q buyer-side TDS trigger above the fifty lakh rupees aggregate threshold (Coal India Ltd is a PSU subject to Section 194Q per CBDT Circular 20/2021, distinct from the Section 194Q(3) Government-exemption position). The Cement Wave 1 sibling at pet-coke import IGST cement plant Chapter 27 Notification 9/2022 reconciliation documents the identical Notification 09/2022-CT(R) mechanic for the cement pet-coke input side (28 percent output GST for cement versus 18 percent for steel is the material difference in ITC utilisation velocity), and coal cess and Clean Energy Cess cement plant TDS Section 194Q reconciliation documents the parallel Rs 400 per tonne Compensation Cess mechanic for cement (where cement is likewise not a cessable output — the stuck-credit mechanic is the same). The Chemicals Wave 1 cross-cluster sibling at Chapter 27 IDS refund bar Notification 9/2022 chemicals documents the parallel situation for the petrochemical refinery downstream side, and the chemical inverted duty refund Chapter 27 blockage calculator is the operational lookup that applies to the steel coking coal side by direct substitution of the input volume and the tax rate.

The Steel Wave 1 Theme 1 iron-ore-royalty-and-DMF-and-NMET series at iron ore royalty DMF NMET steel plant cost accounting India documents the ad valorem 15 percent iron ore royalty on IBMI benchmark price plus 30 percent DMF plus 2 percent NMET mechanic for the captive iron ore mining lease side that runs in parallel to the coking coal import mechanic on the steel-making raw material inbound side (iron ore plus coke are the two primary inputs to the blast furnace). The Cement Wave 1 sibling at limestone royalty DMF NMET cement plant cost accounting India documents the identical royalty structure with limestone substitution — the MMDR Act 1957 plus Section 9B plus Section 9C mechanic transfers directly between the two industries with the mineral substitution and the state-notified rate lookup as the only material differences. The Steel Wave 1 Theme 6 Rule 89(5) inverted duty refund for specialty steel India sibling documents the iron ore Chapter 26 refund route that is NOT blocked by Notification 09/2022 (which only covers Chapter 27) — an important contrast where the 5 percent GST on iron ore input against the 18 percent output GST on finished steel does open a genuine inverted-duty situation on the iron ore leg that remains refund-eligible.

The variance-classification and operational reconciliation methodology framework — mapping each import consignment to a reconciliation surface, holding the bill-of-entry-to-GSTR-2B match as a standing input, applying the Notification 09/2022 refund-block on the Chapter 27 portion, threading the Compensation Cess stuck credit into the Ind AS 2 landed cost and rolling the coking coal cost through the coke oven and blast furnace conversion into finished steel inventory — sits in reconciliation failure mode analysis and reconciliation playbook for monthly close. Operational lookups sit in the Section 393 payment code finder for the correct TDS payment code on parallel domestic coal purchase Section 194Q compliance and the Section 16(4) ITC exposure calculator for the parallel time-limit exposure on the IGST ITC claim window.

The five FAQs below address the operational questions Indian integrated steel plant CFOs, taxation heads, mines-and-materials heads, statutory auditors and Chief Commissioner (Customs) post-clearance audit teams ask most often when building the monthly coking coal import reconciliation packet under the five regulatory anchors — Notification 09/2022-CT(R) refund bar, Customs Tariff Act 1975 Heading 2701 BCD-and-SWS, Section 3(7) Customs Tariff Act 1975 IGST at 5 percent, Goods and Services Tax (Compensation to States) Act 2017 Rs 400 per tonne Compensation Cess and Ind AS 2 landed-cost mechanic — with the Compensation Cess stuck-credit position sitting as the material recurring cost line item that distinguishes the steel-side compliance mechanic from the cement pet-coke sibling on the Chapter 27 fuel basket.

Terra Insight Editorial Team Reconciliation Infrastructure

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Published 28 July 2026

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Navin Krishnan

Managing Director & Founder — Terra Insight

Ex Amazon India · Intuit QuickBooks · Tata nexarc

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