Non-Coking Coal CIL FSA Steel Plant TDS Section 194Q Reconciliation

An integrated Indian steel producer running a three-plant footprint on the Bhilai–Bokaro–Durgapur axis with a combined 15 million tonnes per annum (MTPA) crude steel capacity procures an illustrative 6.8 million tonnes per annum of non-coking coal for coal-based Direct Reduced Iron (DRI) production, captive utility power generation and process steam. The 6.8 MTPA portfolio is split between Coal India Ltd (CIL) Fuel Supply Agreement (FSA) allocations from CIL subsidiaries positioned in the eastern and central coalfield belts — South Eastern Coalfields Ltd (Korba–Raigarh in Chhattisgarh), Western Coalfields Ltd (Nagpur–Chandrapur in Maharashtra) and Mahanadi Coalfields Ltd (Talcher–Ib Valley in Odisha) — and open-market e-auction plus third-party procurement including imported non-coking coal from Indonesia’s Kalimantan medium-calorific-value seams or South Africa’s Richards Bay basin. Every tonne of non-coking coal that lands at the plant siding carries three distinct fiscal levies stacked on top of the basic coal price — the Rs 400 per tonne Compensation Cess (the post-GST manifestation of the legacy Clean Energy Cess originally imposed by Section 83 of the Finance Act 2010 and continued after 1 July 2017 under Notification No. 1/2017-Compensation Cess (Rate)), the GST at 5 percent on coal (HSN 2701) and the Section 194Q TDS obligation at 0.1 percent on the aggregate purchase from any single seller above the Rs 50 lakh threshold in the financial year. The Section 194Q applicability to purchases from CIL and its subsidiaries was clarified by CBDT Circular No. 20 of 2021 dated 25 November 2021 — the Government/State-Government exemption under Section 194Q(3) does not extend to a Government-owned PSU. The reconciliation discipline that reads the CIL FSA versus e-auction versus third-party split at seller-PAN level, tags every Section 194Q trigger per seller, holds the Compensation Cess register tonne-wise-seller-wise-month-wise, runs the GST 5 percent ITC utilisation against Form GSTR-2B under Rule 36(4) and threads the non-coking coal landed cost through the Ind AS 2 raw-material inventory ledger into the cost of DRI, captive utility power and process steam is the subject of this non-coking coal CIL FSA steel plant TDS Section 194Q Wave 1 walkthrough.

Quick reference

The reconciliation in one paragraph

An integrated Indian steel producer with a multi-plant footprint on the Bhilai–Bokaro–Durgapur axis or an equivalent Jamshedpur–Kalinganagar–Angul cluster runs a multi-route non-coking coal procurement engine with three parallel fiscal reconciliation surfaces layered on top of the physical coal receipt. Surface one is the Section 194Q TDS surface — every seller PAN is a separate Rs 50 lakh threshold counter, and the aggregate crosses the threshold at different points in the financial year for each CIL subsidiary (South Eastern Coalfields Ltd, Western Coalfields Ltd, Mahanadi Coalfields Ltd) supplying under Fuel Supply Agreement, the CIL e-auction subsidiary supplying the top-up tonnage and each third-party coal trader or importer. Once the threshold is crossed, TDS at 0.1 percent runs on the incremental value on invoice basis, deposited by the seventh of the following month under Rule 30 and reported quarterly in Form 26Q at the Section 393 Sl. No. 8 payment code (purchase of goods). The CBDT Circular 20/2021 clarification that a Government-owned PSU is not Government for the Section 194Q(3) carve-out means every CIL subsidiary and Singareni Collieries Company Ltd is a live Section 194Q counterparty — this holds even where the buyer is itself a Government-owned steel PSU, because the operative test is the seller’s status not the buyer’s. Surface two is the Compensation Cess register — Rs 400 per tonne on every tonne of non-coking coal received, tonne-wise, seller-wise, month-wise, flowing straight into the Ind AS 2 landed cost of coal inventory (not recoverable as ITC because finished steel HSN 7208 to 7229 is not a Compensation-Cess-bearing outward supply). Surface three is the GST 5 percent ITC reconciliation — invoice-level match against Form GSTR-2B under Rule 36(4) each month and against Section 16(4) each September for the annual cut-off. All three surfaces roll up into the raw-material coal inventory ledger and cross-tie into the plant DCS-log kiln fuel consumption, captive-power boiler heat rate and process-steam boiler record — the KPI stack that the plant CFO and the cost auditor under the Companies (Cost Records and Audit) Rules 2014 both hold in the monthly close packet.

What the scenario looks like in India — a Bhilai–Bokaro–Durgapur integrated steel cluster

The illustrative persona for this walkthrough is an integrated Indian steel producer running a three-plant footprint on the Bhilai (Chhattisgarh) – Bokaro (Jharkhand) – Durgapur (West Bengal) axis with a combined 15 MTPA crude steel capacity — the geographic and operating profile that anchors Steel Authority of India (SAIL) as the reference public-sector integrated steel major, alongside comparable multi-plant footprints run by Tata Steel (Jamshedpur in Jharkhand, Kalinganagar in Odisha), JSW Steel (Vijayanagar in Karnataka, Dolvi in Maharashtra, Salem in Tamil Nadu), Jindal Steel & Power (JSPL) (Angul in Odisha, Raigarh in Chhattisgarh), Rashtriya Ispat Nigam Ltd (RINL / Vizag Steel in Andhra Pradesh) and ArcelorMittal Nippon Steel India (AMNS) (Hazira in Gujarat). Each of these producers runs a large captive non-coking coal procurement engine — non-coking coal serves coal-based rotary-kiln DRI production (particularly at JSPL Raigarh and select Tata Sponge Iron and JSW units), captive utility power generation via subcritical or supercritical circulating fluidised bed combustion (CFBC) plants and process-steam boiler operation. Non-coking coal for steel is a large-volume, multi-source, multi-grade portfolio that lives with the same Section 194Q, Compensation Cess and Ind AS 2 landed-cost reconciliation surface layered on top of every procurement invoice.

The 6.8 MTPA non-coking coal portfolio for the illustrative Bhilai–Bokaro–Durgapur cluster (illustrative — actual plant-level splits vary by CIL allocation, state coal-linkage policy, open-market conditions and the plant’s specific DRI plus captive-power configuration) breaks down as follows: 4.8 million tonnes via CIL FSA — split across South Eastern Coalfields Ltd (SECL, primarily supplying Bhilai from Korba and Gevra mines), Western Coalfields Ltd (WCL, primarily supplying Bhilai and Durgapur from Nagpur and Wardha valley), Mahanadi Coalfields Ltd (MCL, primarily supplying Bokaro and Durgapur from Talcher and Ib Valley) and small residual allocations from Central Coalfields Ltd (CCL) and Eastern Coalfields Ltd (ECL); 1.4 million tonnes via CIL e-auction spot procurement across the same subsidiaries; and 0.6 million tonnes via third-party procurement including imported non-coking coal routed through the Paradip, Haldia or Visakhapatnam ports. The Compensation Cess of Rs 400 per tonne applies uniformly to all 6.8 million tonnes irrespective of procurement route — the annual Compensation Cess load is Rs 272 crore. The GST at 5 percent on the basic-price-plus-cess value stack is recoverable as ITC subject to the Section 16 read-across.

The three-plant cluster’s non-coking coal consumption profile is: approximately 2.4 MTPA drawn for captive utility power (Bhilai’s 500 MW captive plus Durgapur’s 305 MW captive plus a portion of Bokaro’s captive load); approximately 1.6 MTPA drawn for coal-based DRI production (where the cluster runs coal-based rotary-kiln DRI units); approximately 1.2 MTPA drawn for process steam and sinter-plant supplementary heating; and approximately 1.6 MTPA drawn for the blast furnace pulverised coal injection (PCI) and other metallurgical uses where non-coking coal serves as a supplementary fuel alongside the primary coking coal feed. Each of these consumption points has its own metering discipline in the plant DCS/PLC log and its own consumption KPI in the plant monthly cost sheet.

The regulatory overlay — Section 194Q, Section 83 Finance Act 2010, Compensation Cess Act 2017 and Ind AS 2

Four regulatory anchors govern an integrated steel plant’s non-coking coal procurement fiscal close. Section 194Q of the Income-tax Act 1961 governs the buyer-side TDS on purchase of goods above the Rs 50 lakh threshold per seller. Section 83 of the Finance Act 2010 (and the subsequent GST Compensation Cess Act 2017) governs the Rs 400 per tonne cess on coal. The GST framework — Section 16 of the CGST Act 2017 and Rule 36(4) of the CGST Rules 2017 — governs the input tax credit reconciliation on the 5 percent GST component. And Ind AS 2 governs the raw-material coal inventory valuation and the flow of the landed cost through the cost of DRI, captive power and process steam.

Section 194Q of the Income-tax Act 1961 was introduced by the Finance Act 2021 with effect from 1 July 2021. Section 194Q(1) requires a buyer whose total sales, gross receipts or turnover from the business carried on by him exceed Rs 10 crore during the immediately preceding financial year to deduct tax at source at 0.1 percent of the sum exceeding Rs 50 lakh on the purchase value of goods from any resident seller in that financial year. Every integrated steel producer of any material scale in India crosses the Rs 10 crore turnover trigger, so the section is universally applicable. Section 194Q(3) provides three carve-outs — where tax is deductible under another provision, where tax is collectible under Section 206C (other than 206C(1H)), and where the buyer is notified by the Central Government subject to conditions. There was an initial industry expectation that the Government-owned status of CIL would attract a carve-out for steel-industry coal purchases from CIL and its subsidiaries. CBDT Circular No. 20 of 2021 dated 25 November 2021 clarified at paragraph 3 that the Government/State-Government exemption under Section 194Q(3) does not extend to a Public Sector Undertaking or to a corporation established by or under a Central, State or Provincial Act. Two operational consequences flow from this clarification for the steel industry: first, purchases from every CIL subsidiary (South Eastern Coalfields Ltd, Western Coalfields Ltd, Mahanadi Coalfields Ltd, Bharat Coking Coal Ltd, Central Coalfields Ltd, Eastern Coalfields Ltd, Northern Coalfields Ltd) and from Singareni Collieries Company Ltd are Section 194Q live; second, the buyer’s own Government-owned status is irrelevant — the buyer-side TDS obligation attaches to the buyer’s turnover-trigger status and the seller’s non-Government-exempt status, so a Government-owned steel producer (SAIL, RINL) is equally subject to the Section 194Q deduction obligation on purchases from a Government-owned coal PSU. Under the 2026 payment code migration schedule the correct Section 393 Sl. No. 8 payment code (purchase of goods) applies to the TDS deposit and Form 26Q reporting.

Section 83 of the Finance Act 2010 originally imposed the Clean Energy Cess at Rs 50 per tonne on coal, lignite and peat produced in India and on coal, lignite and peat imported into India — subsequently raised to Rs 400 per tonne by the Finance Act 2016. Post the introduction of the Goods and Services Tax on 1 July 2017, the Clean Energy Cess was subsumed under the GST Compensation Cess levied on specified goods under the Goods and Services Tax (Compensation to States) Act 2017. Notification No. 1/2017-Compensation Cess (Rate) dated 28 June 2017 (as amended) specifies the Compensation Cess on coal, briquettes, ovoids and similar solid fuels manufactured from coal at Rs 400 per tonne. The Compensation Cess is payable in addition to the applicable GST rate of 5 percent on coal (HSN 2701) at the point of supply. Section 11 of the Compensation Cess Act read with Rule 3 of the Goods and Services Tax Compensation Cess Rules 2017 restricts utilisation of Compensation Cess input credit to output supply attracting Compensation Cess, and finished steel (HSN Chapter 72 flat and long products, HSN 7208 hot-rolled coil to HSN 7229 wire rod) is not a Compensation-Cess-bearing outward supply. The Rs 400 per tonne on non-coking coal is therefore a permanent cost load for a steel manufacturer.

Section 16(1) of the CGST Act 2017 permits input tax credit on any supply of goods or services used in the course or furtherance of business. Section 16(2) sets four conditions — invoice possession, receipt of goods, tax actually paid to Government, and return filed. Section 16(4) restricts ITC claim to the earlier of the September return following the financial year or the annual return date. Rule 36(4) of the CGST Rules 2017 restricts ITC claim to invoices furnished by the supplier in Form GSTR-1 or through the Invoice Furnishing Facility (IFF) and communicated to the recipient in Form GSTR-2B. For an integrated steel plant procuring 6.8 million tonnes of non-coking coal per annum with a basic-plus-cess landed value of illustrative Rs 2,620 crore, the 5 percent GST ITC of approximately Rs 131 crore per annum is a material working-capital line and the invoice-level Section 16 read-across against Form GSTR-2B is a standing month-end reconciliation. The Section 16(4) ITC exposure calculator helps model the September-cut-off exposure for the non-coking-coal-invoice portfolio.

Paragraph 10 of Ind AS 2 requires the cost of inventories to comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Paragraph 11 elaborates that costs of purchase comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities), transport, handling and other costs directly attributable to the acquisition of finished goods, materials and services. For an integrated steel plant, the Ind AS 2 landed cost of non-coking coal is the sum of the basic coal price at the pit-head or port, the Compensation Cess of Rs 400 per tonne (not recoverable as ITC — flows into the landed cost), inbound rail freight from the pit-head to the plant siding, plant handling, sizing and stockyard costs, and demurrage where applicable. The 5 percent GST on coal is recoverable as ITC (subject to the Section 16 conditions) and therefore excluded from the Ind AS 2 landed cost but tracked separately in the GST reconciliation surface.

A worked example — a Bhilai–Bokaro–Durgapur cluster CIL FSA plus e-auction plus third-party close for FY 2026-27

Illustrative — the following figures represent the operating pattern of an integrated Indian steel producer running a three-plant 15 MTPA crude steel cluster on the Bhilai–Bokaro–Durgapur axis. Public disclosures by listed Indian steel majors do not reveal per-plant non-coking coal procurement pricing at the per-tonne, per-seller granularity below; cross-verify against your own coal procurement register, the CIL price circular in force and the CFO’s Ind AS 2 landed-cost policy before action.

The FY 2026-27 illustrative non-coking coal procurement portfolio for the cluster is 6.8 million tonnes total split across three routes and four principal sellers:

The Compensation Cess of Rs 400 per tonne applies uniformly to all 6.8 million tonnes — total Compensation Cess load of Rs 272 crore for the financial year. The all-in basic-plus-cess value is Rs 2,581 crore. The GST at 5 percent on that basic-plus-cess base is approximately Rs 129 crore, recoverable as ITC subject to Section 16 read-across.

Note on illustrative scaling: the basic-value column above uses simplified per-route unit prices; a working plant register carries the exact CIL price-circular rate per grade in force each month, plus mine-to-plant rail freight (typically Rs 500 to Rs 1,100 per tonne depending on lead-distance for a Bhilai / Bokaro / Durgapur origin-destination pair on SECL, WCL, MCL or CCL coal), plus plant handling, sizing and stockyard costs and demurrage — the full landed cost per tonne varies band-wise and month-wise.

The Section 194Q TDS position per seller PAN at year-end is:

The CIL e-auction lots are typically supplied through the same CIL subsidiary PANs above — so the e-auction tonnage from SECL, WCL and MCL is aggregated into the respective SECL, WCL and MCL FSA aggregates (not treated as a separate “e-auction seller PAN”). This is a key aggregation point: PAN-level roll-up is what Section 194Q measures, and the FSA-versus-e-auction distinction is a procurement-route flag on the invoice, not a separate seller. Adding the e-auction leg to the FSA aggregates raises the total procurement value from each of SECL, WCL and MCL and correspondingly raises the Section 194Q TDS.

Each seller’s aggregate crosses the Rs 50 lakh threshold at a different point in the financial year — typically the CIL FSA aggregates for SECL, WCL and MCL cross by mid-April (given the large monthly FSA volumes), and the third-party imported aggregate crosses within the first two to three shipments (given the large per-shipment value of an imported cargo). TDS at 0.1 percent runs on the incremental value on invoice basis from the crossing invoice onwards, deposited by the seventh of the following month under Rule 30 and reported quarterly in Form 26Q at the Section 393 Sl. No. 8 payment code (purchase of goods). The Section 393 payment code finder tool helps map the exact 2026-migration payment code for each TDS deposit.

The Compensation Cess register for the year is tonne-wise-seller-wise-month-wise — an illustrative row for June 2026 might read: SECL FSA plus e-auction combined 220,000 tonnes at Rs 400 = Rs 8.80 crore; WCL FSA plus e-auction 145,000 tonnes at Rs 400 = Rs 5.80 crore; MCL FSA plus e-auction 135,000 tonnes at Rs 400 = Rs 5.40 crore; imported coal 55,000 tonnes at Rs 400 = Rs 2.20 crore; June total Rs 22.20 crore. The monthly Compensation Cess load cross-ties to the plant DCS/PLC log at four consumption points — the coal-based DRI kiln feed weigh-scale, the captive utility power CFBC boiler feed, the process-steam boiler feed and the blast furnace pulverised coal injection (PCI) feed — with any variance between coal-inventory-issued-to-consumption-point and consumption-recorded flagging either a stock-taking discrepancy at the coal stockyard or a metering-calibration drift for investigation.

The Ind AS 2 landed cost per tonne of non-coking coal for the June 2026 receipts, illustrative, works out approximately as follows for the largest-volume SECL FSA route to Bhilai: basic price Rs 3,150 + Compensation Cess Rs 400 + inbound rail freight Korba to Bhilai Rs 550 (illustrative for a short lead-distance) + plant handling and sizing Rs 60 + demurrage Rs 15 = landed cost Rs 4,175 per tonne. For the MCL FSA route to Bokaro or Durgapur (longer lead-distance from Talcher to Bokaro or Durgapur), the rail freight component rises to approximately Rs 900 per tonne, taking the landed cost to approximately Rs 4,525 per tonne. The 5 percent GST is Rs 178 per tonne (on the Rs 3,150 basic + Rs 400 Compensation Cess = Rs 3,550 GST-taxable base multiplied by 5 percent) — excluded from the Ind AS 2 landed cost, captured separately in the GST ITC surface for Form GSTR-2B reconciliation.

The landed cost of approximately Rs 4,175 to Rs 4,525 per tonne flows into the raw-material coal inventory ledger. From the ledger, the coal issues by end-use are: coal-based DRI kiln at approximately 1.5 tonnes of non-coking coal per tonne of DRI, translating to a DRI-coal-cost of approximately Rs 6,265 to Rs 6,790 per tonne of DRI (before other DRI conversion costs); captive utility power boiler at approximately 0.65 kg per kWh, translating to a coal-cost-per-kWh of approximately Rs 2.71 to Rs 2.94 per kWh (again before other power-plant fixed and variable costs); and process-steam boiler at approximately 0.14 tonne of coal per tonne of steam raised, translating to a steam-cost of approximately Rs 585 to Rs 635 per tonne (before other boiler operating costs). Each of these unit costs feeds into the finished steel cost stack via the DRI-in-steel-melting-shop input rate for EAF units, the power-in-plant KPI and the process-steam-in-plant KPI.

Common reconciliation breakages

Five breakages recur across Indian integrated steel producers running the multi-route CIL FSA plus e-auction plus third-party non-coking coal procurement with Section 194Q plus Compensation Cess plus GST 5 percent ITC plus Ind AS 2 landed-cost close.

• Section 194Q aggregation at the wrong PAN level. Section 194Q applies to the aggregate purchase from a single seller in the financial year above the Rs 50 lakh threshold — and an integrated steel plant procuring from multiple CIL subsidiaries (South Eastern Coalfields Ltd, Western Coalfields Ltd, Mahanadi Coalfields Ltd, Central Coalfields Ltd, Eastern Coalfields Ltd, Northern Coalfields Ltd, Bharat Coking Coal Ltd) plus Singareni Collieries Company Ltd must aggregate at the PAN level of each subsidiary separately. Rolling all CIL subsidiary purchases into a single “CIL group” aggregate over-deducts TDS by triggering the threshold sooner than the correct per-PAN aggregation; the opposite error of treating the CIL FSA leg and the CIL e-auction leg from the same subsidiary as two separate sellers understates the aggregate. Reconciliation discipline: the non-coking coal procurement register is keyed on the seller PAN, the FSA-versus-e-auction distinction is a procurement-route flag on the invoice rather than a separate seller, the financial-year aggregate is rolled at the seller-PAN level and the Section 194Q trigger point is recognised per PAN with a documented aggregation policy note in the CFO close packet. Terra Insight’s reconciliation failure mode analysis for India design pillar and reconciliation playbook for monthly close operations pillar frame the design-and-operate discipline that surfaces the PAN-aggregation failure at the crossing invoice rather than at the year-end tax audit.

• PSU carve-out misinterpretation — buyer’s own PSU status held to negate the buyer-side Section 194Q obligation. A recurring interpretation error at Government-owned steel majors (SAIL, RINL) is to argue that because the buyer is itself a Government-owned PSU and the seller is also a Government-owned PSU (CIL subsidiary), the Section 194Q(3) exemption applies to a PSU-to-PSU transaction. This is incorrect. The Section 194Q(3) exemption is drafted with reference to the seller’s status (Government / State Government) and to the buyer’s status only in the “notified by Central Government” limb — CBDT Circular 20/2021 clarifies that PSU is not Government for the seller-side test, and the buyer’s own PSU status does not attract any carve-out because there is no notification exempting PSUs generally from the Section 194Q buyer-side deduction obligation. Every Government-owned steel producer is therefore fully subject to the Section 194Q TDS deduction obligation on purchases from CIL and its subsidiaries. Any legacy exempt-tagging on FY 2021-22 or FY 2022-23 CIL purchases at a steel PSU must be re-audited and reversed with catch-up TDS deposit plus interest under Section 201(1A) at 1 percent per month from the date TDS ought to have been deducted to the date of actual deduction, and 1.5 percent per month from the date of actual deduction to the date of deposit.

• Compensation Cess register drift — cess captured at aggregate level instead of invoice level. The Rs 400 per tonne Compensation Cess must be captured on invoice basis into the Ind AS 2 landed cost — tonne-wise, seller-wise, month-wise, with cross-reference to the specific coal grade and CIL price-circular reference. A plant that captures the cess only at monthly aggregate level (say Rs 22 crore in June without the per-invoice split) loses the per-invoice traceability that a statutory auditor reviewing Ind AS 2 inventory valuation or a GST audit under Section 65 will demand. Reconciliation discipline: the coal-procurement register carries a dedicated Compensation Cess column at the invoice-line level, and the monthly aggregate is a computed roll-up rather than a hand-entered figure. The cross-cluster Coal Cess Clean Energy cement plant TDS Section 194Q reconciliation walkthrough covers the same Rs 400 per tonne cess mechanic on the cement side of the same cess register — the mechanic is identical because both sectors receive Compensation-Cess-bearing input and produce non-Compensation-Cess outward supply.

• GST 5 percent ITC Section 16(4) breach on delayed matching. The ITC on non-coking coal GST must be claimed by the earlier of the September return following the financial year or the annual return date under Section 16(4). Rule 36(4) further restricts the claim to invoices furnished by the supplier in Form GSTR-1/IFF and communicated to the recipient in Form GSTR-2B. A plant that fails to reconcile the coal-supplier invoices against Form GSTR-2B within the monthly cycle risks two-way exposure: an invoice not appearing in GSTR-2B by the monthly cycle is not eligible for ITC in that month under Rule 36(4); an invoice not appearing in GSTR-2B by the September cut-off breaches Section 16(4) and the ITC is permanently lost. For an integrated steel plant with Rs 131 crore of annual non-coking coal GST ITC across four to six supplier PANs, even a small percentage of unmatched invoices carrying into the September cut-off can produce a multi-crore-rupee ITC leakage. Reconciliation discipline: the coal-invoice ITC surface runs a two-way match (procurement register versus Form GSTR-2B) each month with supplier-follow-up on any unmatched invoice, and the September pre-cut-off packet flags any residual unmatched value for supplier escalation or ITC reversal decision.

• Consumption-point KPI drift not tied to procurement register. The non-coking coal at an integrated steel plant is consumed at four distinct end-points — the coal-based DRI kiln (approximately 1.4 to 1.6 tonnes coal per tonne DRI), the captive utility power CFBC boiler (approximately 0.62 to 0.72 kg per kWh), the process-steam boiler (approximately 0.14 tonne per tonne of steam) and the blast furnace pulverised coal injection (approximately 130 to 180 kg per tonne of hot metal). A plant that reports each of these consumption KPIs as a plant-metric-in-isolation without tying it back to the coal-procurement register and the DCS/PLC log from each consumption point misses the operational cross-tie that surfaces a metering drift, a stock-taking discrepancy or a coal-grade slippage. The plant fuel and combustion engineering (FCE) head and the plant CFO both need the four-KPI-plus-inventory-plus-procurement view in one packet each month — the human errors detection envelope anchor frames the human-error taxonomy that surfaces the metering-to-ledger reconciliation gap and its coverage limits honestly.

How a reconciliation platform handles this

A purpose-built steel reconciliation platform ingests every CIL FSA invoice, e-auction lot invoice and third-party non-coking coal invoice against a coal-procurement register keyed on the seller PAN, tags each invoice at capture with the procurement route (FSA / e-auction / third-party domestic / third-party imported), the CIL subsidiary identity, the coal grade (G1 to G17 non-coking), the tonnage, the basic price, the Rs 400 per tonne Compensation Cess, the GST 5 percent and the landed-cost build-up including inbound rail freight, plant handling and sizing, and demurrage. The platform rolls the financial-year aggregate at the seller-PAN level (treating FSA and e-auction from the same CIL subsidiary as a single aggregate under one PAN), triggers Section 194Q TDS at 0.1 percent on the incremental value above the Rs 50 lakh threshold, confirms the deposit by the seventh of the following month under Rule 30 and reports quarterly in Form 26Q at the Section 393 Sl. No. 8 payment code. The Compensation Cess register runs tonne-wise-seller-wise-month-wise with cross-reference to the four consumption-point DCS logs (coal-based DRI kiln, captive utility power CFBC boiler, process-steam boiler, blast furnace PCI feed); the GST 5 percent ITC surface runs an invoice-level two-way match against Form GSTR-2B under Rule 36(4) each month and against Section 16(4) each September; the Ind AS 2 raw-material coal inventory ledger runs the landed cost per tonne through the coal-consumption-per-tonne-of-DRI norm into the DRI-cost ledger, through the coal-to-kWh heat rate into the captive-power-cost ledger and through the coal-to-tonne-of-steam ratio into the process-steam-cost ledger. Match-rate improvement of 51 to 88 percent on the coal-procurement-register-to-invoice-portfolio reconciliation, combined with an ISO 27001:2022 security posture and DPDP Act 2023 aligned data handling for CBDT-facing and GST-audit-facing submissions, is what makes the platform an infrastructure investment for an integrated Indian steel producer running a multi-plant multi-route non-coking coal procurement engine — rather than a spreadsheet substitute that leaves the per-seller-PAN aggregation, the CBDT Circular 20/2021 PSU-carve-out interpretation, the tonne-wise Compensation Cess register discipline and the September-cut-off ITC reconciliation as manual overheads on a hybrid plant-commercial-plus-finance-plus-tax team. The commercial pillar for the steel sub-cluster is steel reconciliation software India; the broader authority for the platform is reconciliation software India. The sibling coking coal import IGST steel plant Chapter 27 Notification 9/2022 reconciliation walkthrough covers the parallel coking-coal side of the same steel plant’s carbonaceous input portfolio; the cross-cluster petcoke import IGST cement plant Chapter 27 Notification 9/2022 reconciliation walkthrough covers the equivalent Chapter 27 mechanic on the cement side; and the Iron ore royalty DMF NMET steel plant cost accounting India cornerstone covers the iron-ore royalty and MMDR Act 1957 reconciliation surface that sits alongside the coal reconciliation surface in the same steel plant’s raw-material fiscal close.

Terra Insight Editorial Team Reconciliation Infrastructure

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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

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Navin Krishnan

Managing Director & Founder — Terra Insight

Ex Amazon India · Intuit QuickBooks · Tata nexarc

ISO 27001:2022 Patent Pending Incorporated 2024