Supreme Court Verdict Shakes Indian Mining Industry

The Supreme Court's decision on the mining royalty case will have a significant financial impact on the Indian mining industry. States can levy taxes on mineral rights retroactively from April 1, 2005. This decision is expected to affect mining, steel, power, and coal companies significantly.

The Supreme Court's ruling on the mining royalty case, delivered Wednesday, will significantly impact the Indian mining industry, potentially resulting in financial implications worth between Rs 1.5 lakh crore and Rs 2 lakh crore according to industry experts.

Upholding the states' authority to levy taxes on mineral rights, the Supreme Court also allowed the collection of royalty arrears dating back to April 1, 2005. This ruling, seen as having a considerable financial impact, is expected to affect not only the mining sector but also steel, power, and coal companies.

FIMI's Additional Secretary General B K Bhatia emphasized that this verdict grants States considerable leeway to impose taxes, further burdening a sector already facing one of the highest global taxation rates. The ramifications of the decision, he said, could extend throughout the value chain, leading to inflation in end products. The Centre has expressed concerns, citing a potential Rs 70,000 crore financial burden on PSUs.

(With inputs from agencies.)