Mining Tax: Top Cos explore legal options following Supreme Court ruling

livemint.com:

Mint. Tata Steel will explore legal options regarding any dues that may arise if the Supreme Court rules that its judgment will be applicable retrospectively, while Hindustan Zinc (HZL) will also knock on the doors of the courts if any immoderate demands are raised. On 25 July, a nine-judge constitution bench of the Supreme Court upheld the rights of states to collect tax on mining activities and held that royalty paid to states on minerals does not qualify as tax.

The apex court reserved its verdict on the retrospective applicability of the rule. “If the government (levies) anything which is not in the Constitution, then we can go to the court; but if it is (levying) something in line with the Supreme Court (judgment), it will be for everyone," said Sandeep Modi, CFO of HZL, adding that there is no material impact on the company from retrospective taxation. To be sure, solicitor general Tushar Mehta said in the Supreme Court last Tuesdaythat such a verdict if applied retrospectively could impose a financial burden of ₹70,000-80,000 crore on public sector units (PSUs).

Also read | Mint Primer | Mining minerals: Could cement & steel get dearer? Tata Steel has even noted contingent liabilities of ₹17,347 crore in its financial statements pending clarity on the matter, the company said in a regulatory disclosure on Friday. “There's no demand (raised against us). So, it's not necessary that we have to pay that amount.

But we have to fight that now. So, there'll be a lot of litigation," T.V. Narendran, Tata Steel’s managing director, told Mint during a post-earnings call.