-54000 Crores loss to State Ex-chequer -

 Activists urged Govt for Imposition of additional royally (tax) on private legacy mines as per SC ruling.

By Bijay Mishra
Bhubaneshwar, 01-8-2024 

In view of the  recent judgment of Hon’ble Supreme Court dated 25.07.2024 in Civil Appeal Nos. 4056-4064 of 1999, several activists, experts and concerned citizens urged the Govt for Imposition of additional royally (tax) on private legacy mines. 
In the said landmark judgment , the SC clarified that , Royalty is not a tax and the State Govt has the competence to tax lands which comprise of mines and quarries (Page no 198 ~199 of the Judgement). 
   Presently, the auctioned mines are required to pay the bid premium, royalty, DMF and NMET. Assuming a minimum of bid premium @ 100% of the ASP the auctioned mines are paying a total of 117% of the ASP to the State Govt. 
  Govt companies like OMC AND SAIL are paying additional amount @150% of Royalty along with royalty, DMF and NMET under Sec 17A(2C), Sec 8A(8) and Sec 8(4) as per Fifth Schedule of the MMDR Act. Thus they are paying 42.5 % of the ASP.
    However Contrary to the above two categories,private legacy mines like TATA, Rungta and  some other mines
are paying only the royalty, DMF and NMET which comes around 19.2% of the ASP .These mines are producing more than 60 MT of iron ore in Odisha.
   Assuming that the average IBM price of iron ore Rs4000/t,the loss to the State ex- chequer would be is Rs. 5,400 crores annually (60 MT x Rs. 4,000/t x 22.5%) from the third category of private legacy mines.In a period of 10 years total loss would be Rs 54000 Crores.
   Submitting detail about the loss , Mr Bijay Parida, President, Jana Adhikari Parisada in a letter to Chief Minister, Odisha told that , 
since the State Govt has been empowered to impose taxes by virtue of the recent judgement of the Hon’ble Supreme Court on mines, a reasonable additional amount of 150 % of the royalty payable should be imposed on private legacy mines who are not paying any premium/ additional royalty now.
 “This is would be the best way to boost up the state ex-chequer and would eradicate the serious anomaly in the payment system by different categories of mines. “ - told Mr Parida