The Supreme Court has ruled that royalty payable on minerals is not a tax, and states have the legislative competence to impose taxes on mines, minerals and mineral-rich land.
The case centered on the Mines and Minerals (Development and Regulation) Act, 1957, with the Government of India contending that only Parliament had the power to tax minerals.
However, the Court ruled that the Act does not prevent states from imposing taxes on mining and mineral extraction.
This ruling is anticipated to benefit mineral-rich states such as Jharkhand and Odisha, which are pursuing the recovery of taxes amounting to thousands of crores of rupees imposed by the Centre on minerals.