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Parliament curbs state taxes on mineral rights
LiveLaw··13 Aug
Parliament has passed the Mines and Minerals Amendment Bill, 2026, after the Rajya Sabha cleared it on August 13 following the Lok Sabha a day earlier. New Section 9D bars states from taxing mineral rights or mineral-bearing land by quantity, value or royalty except on conditions the Centre prescribes. Unrecovered state levies imposed before the amendment are treated as invalid.
Prism
What It Means For You
- If you pay or collect a state mineral cess, unpaid amounts from before the amendment can be treated as invalid once the law is notified.
- Mining firms can note already-paid levies stay with the state; the change targets future taxes and arrears still on the books.
- Residents of mineral states can watch Kerala and others that have said they will contest the curb on Entry 50-style mineral taxation.
What's Happening
- Both Houses have passed the MMDR Amendment Bill, 2026, inserting Section 9D to restrict state taxes, cesses and other levies on mineral rights and mineral land.
- Levies not yet deposited or recovered before commencement are deemed invalid; amounts already collected need not be refunded.
- Kerala said it would register a protest and examine a legal challenge, arguing the change erodes state revenue powers.
Why the 2024 Mineral Tax Ruling Triggered This Bill
- The 2024 Constitution Bench said mineral taxation is a state field and refused to make that ruling prospective only, opening claims back to 2005.
- The statement of objects said multiple, retrospective and varying state charges raised the cost of minerals and of goods that use them.
- The law comes into force on a date the Centre notifies in the Gazette, so Section 9D does not apply until that notification.
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