Centre expects hit of over Rs 1 lakh crore from apex court order allowing retrospective mining levies
mining companies because of retrospective applicability of the Supreme Court order allowing state governments to levy taxes besides royalty on mining operations.
“We are studying the impact of the Supreme Court order and will take a call on the future course of action. It is estimates that the industry wide impact is over Rs 1 lakh crore,” a top government official told ET while adding that retrospective applicability of the levies is a major concern.
Estimates from the mining industry peg the total payout at much higher. According to B K Bhatia, Additional Secretary General at the Federation of Indian Mineral Industries (FIMI), the Indian mining industry as arrears may work out to the tune of more than Rs. 1.5 to Rs. 2 lakh crores.
“Mines in Odisha and Jharkhand would be most affected. This is bound to have crippling impact not only on the mining industry but on the entire value chain and will lead to unprecedented inflationary rise in all the end products,” Bhatia said.
After Wednesday’s verdict, State governments are allowed to levy additional taxes on mining operations from April 1, 2005. But what comes as a relief to mining companies, the top court has waived any interest payments on such liabilities raised by states. Further, the tax payment shall be staggered in instalments over a 12-year period commencing from April 1, 2026.
“Companies have already sold the extracted minerals and will not be able to able to pass through costs,” the official said while adding that this may lead to further litigation when
