Union Government Proposes Bill to Limit State Taxation on Mineral Rights

In a significant move, the Union government has introduced a bill in the Lok Sabha aimed at curtailing the ability of state governments to levy taxes on mineral rights. This proposed legislation, known as the 2026 Mines and Minerals Development and Regulation Amendment Bill, was presented by Union Minister of Coal and Mines, G Kishan Reddy, amidst ongoing protests from opposition members.

The bill seeks to empower the central government to oversee mineral-bearing lands, adhering to the frameworks established by the 1957 Mines and Minerals Development and Regulation Act. One of the key provisions of the bill stipulates that states will be prohibited from imposing any form of tax, cess, or levy on mineral rights, irrespective of what they may be called. The parameters for this restriction will be determined by various factors, including the volume or value of the minerals extracted, royalty payments, and other criteria set forth by the government.

Under the proposed legislation, mineral-bearing lands will be subjected to specific conditions and regulations outlined by the Union government, which aims to instill a sense of consistency and predictability in the mineral sector’s fiscal policies. This change is significant in a country where resource extraction is a crucial economic driver, and the clarity provided by the bill could foster a more stable investment environment.

However, the bill also contains a clause that states any taxes, cess, or other levies that have already been paid or collected by state governments prior to the implementation of this legislation will not be eligible for refunds. This aspect of the bill has raised concerns among some stakeholders who fear it may not adequately address the financial implications for states reliant on such revenue.

Reddy emphasized the government’s intent to provide a more structured and predictable regulatory framework that could benefit the mining sector. By limiting state-level taxation, the government hopes to encourage investment and enhance the operational landscape for mining companies. As the discussions unfold in Parliament, the bill’s implications for states and the overall mineral rights framework will be closely monitored by industry experts and political analysts alike.

Source: scroll.in