Parl clears bill to curb states’ tax on minerals; Soren warns of stir

Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, a move that significantly curtails the ability of state governments to tax minerals. The bill, which amends the existing act, standardizes national mineral rates and restricts states from imposing steep taxes and levies on mineral rights and lands. Union Mines Minister G Kishan Reddy stated the legislation aims to regulate major minerals while allowing states to retain control over minor ones, asserting it does not infringe on state autonomy or revenues. However, this assertion is directly challenged by the bill's new section, which prohibits states from imposing taxes, cess, or other levies on mineral rights or lands except under central government conditions. This legislation is a direct response to a Supreme Court ruling in July 2024 that had affirmed states' power to levy such taxes, a decision hailed by mineral-rich states as a fiscal victory. The amendment invalidates any uncollected state levies and prevents refunds for already collected taxes, a move that has sparked strong opposition. Jharkhand's chief minister has already warned of a "massive agitation," signaling a significant conflict between the central government and mineral-producing states over fiscal control and resource revenue. The bill passed the Lok Sabha with little debate and cleared the Rajya Sabha via a voice vote amidst opposition protests and a refusal to call for divisions, further highlighting the contentious nature of the legislation.

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Unbalanced imposition of steep taxes and levies will prompt the industry to completely bypass local supply lines, leading to sub-optimal development of markets, increased transportation costs and the resultant pollution load.