Supreme Verdict on Mineral Rights Sparks Royalty Refund Debate

The Centre has opposed a plea from mineral-rich states seeking a refund of royalties on mines and mineral-bearing land since 1989. The Supreme Court's recent verdict stated legislative power to tax mineral rights vests with the states. Some states are urging for a retrospective application, which the Centre and various mining firms oppose, citing a 'multipolar impact.'

The Centre on Wednesday opposed in the Supreme Court a plea from mineral-rich states seeking a refund of royalties levied on mines and mineral-bearing land since 1989, arguing that such an order would have a 'multipolar impact.'

On July 25, a nine-judge constitution bench headed by Chief Justice D Y Chandrachud ruled 8:1 that the legislative power to tax mineral rights belongs to the states, and that the royalty paid on minerals is not a tax. This landmark verdict boosted revenues for mineral-rich states but created a new dispute over its implementation.

Opposition-ruled mineral-bearing states have urged the Supreme Court to make the ruling retroactive, enabling them to seek a royalty refund from the Centre. However, the Centre and many mining firms oppose this, citing complex repercussions. Solicitor General Tushar Mehta noted that states like Madhya Pradesh and Rajasthan, ruled by the BJP, advocate for the judgement to apply only prospectively. The hearing is ongoing.