New Delhi: In a setback for mining companies, the Supreme Court asserted that its recent judgment granting states the power to tax mineral rights and mineral-bearing land will apply retrospectively.
A constitutional bench on Wednesday rejected the Union government’s plea for the court’s 25 July judgement to be applicable prospectively to avoid a significant financial burden on mining companies.
In some relief to mining companies, though, the Supreme Court clarified that while states can recover past tax dues on mineral rights, they cannot for periods before 1 April 2005. Additionally, any interest and penalties levied on or before 25 July 2024 shall be waived, it said.
On 25 July, a Supreme Court bench led by Chief Justice of India DY Chandrachud upheld the power of states to tax mining lands and quarries independently of the Mines and Minerals (Development and Regulation) Act of 1957.
Mint previously reported that this judgment could increase the financial burden on mining companies, potentially disrupting cash flow and leading to overlapping financial obligations.
