Speaking to journalists after the Rajya Sabha passed the bill, mines minister G Kishan Reddy said excessive fiscal burdens make mining operations commercially unviable, discourage mineral extraction, adversely affect mineral production and, in some cases, lead to mine closures. Responding to concerns raised by opposing members of parliament that this contravenes constitutional provisions, Reddy said the centre will get no share of the mining tax proceeds and the states will continue to be the primary beneficiaries.
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ET reported on January 1, 2025, that the Centre was planning to curb excessive mining taxes imposed by states.
The move to impose these restrictions follows a 2024 Supreme Court verdict allowing states to levy additional taxes on mining operations in their territories. The verdict was followed by fresh mining taxes in Karnataka, Jharkhand and Tamil Nadu.
According to Reddy, any fiscal burden imposed on mineral extraction should be guided by a uniform and balanced fiscal framework across the country. He said the framework for putting these guardrails on states will be put in place.
“The cumulative incidence of different levies should not become disproportionate to the economic value and profitability of the mining operations,” Reddy had said while introducing the bill in the Lok Sabha.