2 hours ago
The Centre on Friday said states would continue to receive around 90 per cent of total taxes and statutory payments from mining operations even after the implementation of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, as it sought to address concerns raised by mineral-rich states over the legislation.
“The amendment Bill will not take away any of the rights of the States on land and minerals or any tax on minerals collected by the States. At present, out of the total taxes and statutory payments in mining, around 90% accrues to the States and this arrangement will continue even after the amendment,” the ministry said in a statement.
The Mines Ministry said that between FY2015-16 and FY2025-26, major mining states received more than Rs 5 lakh crore from the sector, while the Centre's share during the period stood at around Rs 82,000 crore.
The clarification comes after opposition from mineral-producing states, including Jharkhand and Kerala, which have raised concerns over the impact of the amendment on states' taxation powers and fiscal autonomy.
The ministry said states currently impose around 14 types of taxes, charges, fees and other levies on mining operations, including royalty, auction premium, dead rent, District Mineral Foundation (DMF) contributions, goods and services tax (GST) and transit fees.
The Centre has argued that differences in state-level levies increase the cost of minerals and can make domestic production less competitive. It said uneven taxation could encourage industries to rely on imported minerals despite the availability of domestic resources.
India imported minerals worth Rs 10.13 lakh crore in FY2025-26, according to the ministry. It said the unbalanced imposition of steep taxes could increase dependence on imports and put a burden on the exchequer.
The ministry also highlighted the role of the mineral auction regime introduced in 2015 in increasing state revenues. Between FY2020-21 and FY2025-26, major mining states collected more than Rs 96,000 crore in auction premiums, in addition to other revenue sources such as royalty, DMF and GST.
“Thus, states which have taken lead in auction and operationalisation of auctioned blocks have seen exponential rise in their revenues,” the ministry said.
The ministry's statement comes against the backdrop of concerns raised by states over the constitutional implications of the MMDR amendment. Jharkhand Chief Minister Hemant Soren has written to Prime Minister Narendra Modi seeking reconsideration of the legislation, arguing that the proposed restrictions could affect states' fiscal powers over mineral-bearing lands.
Jharkhand has said mining revenue accounted for 84.9 per cent of its own non-tax revenue in 2024-25 and that its Mineral Bearing Land Cess was expected to generate around Rs 11,000 crore annually.
The ministry did not provide an estimate of the potential impact of the amendment on state revenues or quantify the savings mining companies could realise from the provision invalidating unrecovered or uncollected past levies.
