SC upholds state’s right to mining tax retrospectively from 2005, Mining Cos to pay Rs 1.5 Lakh crore

In a landmark ruling on Wednesday a 9 Judge bench headed by CJI DY Chandruchud upheld the states' authority to impose taxes on mineral rights and allowed them to seek refunds of royalties dating back to April 1, 2005. This decision follows a July 25 verdict where the court, in an 8:1 majority, overturned a 1989 ruling that only the Centre had the authority to levy such royalties. This decision is set to cost the mining companies in India a whopping Rs 1.5 Lakh Crore. 

Following this decision the shares of major ming companies took a major hit in the stock market. The shares of some major metal companies were hit sharply following the judgement. As of 2 pm, stock prices of Hindustan Zinc, NMDC, Coal India and SAIL slumped 0.9%, 5.2%, 3.3% and 1.6% respectively on BSE Sensex. Tata Steel dropped 2.6% to Rs 145.52 apiece. Meanwhile, benchmark indices were trading muted with a positive bias.The Federation of Indian Mineral Industries (FIMI) has expressed concern over the verdict, stating that the Indian mining sector already faces the highest taxation rates globally. B K Bhatia, Additional Secretary General of FIMI, highlighted that the August 14 ruling, which mandates the collection of dues retrospectively from April 1, 2005, will severely impact the industry. He noted that mines in states like Odisha and Jharkhand would be among the hardest hit.

However, it's not all bad. The SC has said that since the amount will be very big the mining companies can pay their dues to the respective government through instalments over a period of 12 years starting now. SC also directed the states to not impose any penalties on these dues. 

Source : 

https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/mining-tax-case-sc-ruling-on-royalty-case-may-cut-indian-mining-cos-a-rs-2-lakh-crore-bill/articleshow/112517995.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst