The revenue and forest department, through a circular issued on July 9, said the earlier policy had resulted in legal challenges from developers and construction companies as several of its provisions were found to be inconsistent with judgments delivered by the Supreme Court and the Bombay High Court.
The government said the 2023 circular has therefore been cancelled with immediate effect.
The withdrawn circular had laid down a methodology to calculate royalty on soil, stone and other minor minerals generated during foundation excavation and plot development after obtaining approvals from planning authorities.
The levy was based on notional percentage assumptions linked to the size of the land parcel rather than the actual quantity of minerals excavated, with field authorities initiating recovery proceedings based on the prescribed formula.
According to the government circular, implementation of the policy had triggered the possibility of penal action by field officials, leading to a series of court cases and creating uncertainty for the real estate sector.
It noted that developers had raised substantial legal objections, arguing that the circular conflicted with judicial precedents governing the extraction and transportation of minor minerals during legitimate construction activities.“This will help streamline the procedures for verifying the end use of minor minerals, whether for self-use or commercial purposes,” said Vidya Adsule, founder of Versatile Law Partners. “The introduction of a basis for calculating penalties will bring the required transparency. It will also curb arbitrary decisions by officers while levying penalties. Builders, developers, contractors, infrastructure companies and farmers will get relief from unjustified royalty and penalty demands by the authorities.”
The latest circular said the government intends to frame a fresh and more transparent framework after taking into account the directions issued by the Supreme Court and High Court. The objective would be to ensure compliance with judicial rulings, prevent arbitrary action by field authorities, safeguard government revenue and minimise litigation.
Until a revised policy is notified, the government said a new government resolution or circular will be issued clearly laying down the procedure for obtaining permissions for excavation and transportation of minor minerals generated during land development and construction activities under Rule 46 of the Maharashtra Minor Mineral Extraction (Development and Regulation) Rules, 2013.
The decision is expected to be closely tracked by real estate developers, infrastructure companies and contractors undertaking large-scale excavation works, as the 2023 framework had become a significant source of disputes between project proponents and district authorities. Industry executives said the withdrawal could reduce regulatory uncertainty in the near term while they await clarity on the government’s proposed replacement policy.