GST Council update allows Coal India to claim input tax credit at 18% even as output GST was cut to 5%, resolving an inverted duty structure and boosting margins

Fri 9 Oct 2026

Portfolio shifted to lower GST

95 percent

FY26 margin benefit estimate

80 basis points

Structural margin improvement potential

150 basis points

Estimated annual pre-tax benefit

50 to 100 crore rupees

FY26 PAT impact

3 to 6 percent

Heard on business television between 13:22:33 - 13:25:33 IST.

• From 1st November, input tax credit previously paid at 18% on services/raw materials will now be available, benefiting Coal India after 95% of its portfolio moved from 18% to 5% GST.
• Ad spends, royalties and logistics services on which input tax credit was paid could benefit, estimated at around 80 basis points for FY26.
• Nomura note suggested a possible 150 basis points structural margin improvement, with estimated annual pre-tax benefit of 50 to 100 crore rupees.
• For FY26, 3 to 6 percent of this could translate to overall PAT, with full-year impact seen in FY28 rather than FY27.
• The stock saw a spike in trade following the GST Council update.

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