The imposition of further taxes/levies/fees, if any, as permitted by the judgment, will further impact the economics of mining operations, possibly rendering them unviable with its natural consequences.
The Goa Chamber of Commerce and Industries (GCCI) has demanded an urgent review of the Supreme Court’s decision on mineral tax, saying rising cost of mining will inevitably lead to higher prices for commodities including steel, power and cement.
Last month, the Supreme Court allowed states to collect royalties arrears on mineral-producing land from central states and mining companies from April 1, 2005 onwards.
“The imposition of further taxes/levies/fees, if any, as permitted by the ruling, will further impact the economics of mining operations, possibly rendering them unviable with its natural consequences.
“Furthermore, rising cost of mining will inevitably lead to higher prices for commodities like steel, power, cement etc., further fuelling inflation and consequent impact on the country’s economy,” GCCI said in a statement.
The possible impact would be a shift in objectives, particularly when the auction regime comes into vogue after the enactment of the MMDR (Amendment) Act in 2015, while creating uncertainty in the country’s mineral taxation regime, he said.
It can negatively impact downstream industries and lead to inflation in mining costs that impacts the entire economy.
While GCCI respects the apex court’s decision, it believes that the decision could have devastating consequences in the future, for the mining industry in the country as a whole, including Goa, which is yet to recover from the aftermath of the mining ban in 2018.
“Iron ore mining in Goa has just started and/or is about to resume its operations after a long hiatus of 6 years. It is public knowledge that after the change in mining regulations in 2015, mining companies have to pay a substantial amount in the form of auction premium for winning the tender, apart from other statutory dues like royalties, DMF/NMET contributions etc.,” it said.
The imposition of further taxes, levies or fees, if any, as permitted by the ruling, will further impact the economics of mining operations, possibly rendering them unviable with its natural consequences.
“We are compelled to request the authorities to review the verdict in the light of the industry submissions to find a balanced solution that ensures revenue generation while ensuring the survival of the mining sector,” GCCI President Shrinivas Dempo said.
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First published: September 22, 2024 | 12:17 pm IS
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