Mining companies must pay taxes to states from 2005, as per the Supreme Court ruling.
Supreme Court ruled that the dues can be paid in staggered installments spread over 12 years, with interest and penalty on past dues scrapped.
The Supreme Court has ruled that states can collect previous dues on royalty and tax on mineral-bearing land from April 1, 2005, from mining companies. This can be paid in staggered installments over 12 years, starting April 1, 2026. However, interest and penalty on the past dues have been nullified. The ruling has affected the sentiment of shares of mining companies such as Tata Steel, JSW Steel, GMDC, and MOIL.
Shares of companies such as NMDC are also under selling pressure on Dalal Street in anticipation of a cess on royalty. Mining giant Vedanta is likely to be impacted as it has a large exposure to mining operations in Odisha.
Hind Zinc CEO Arun Misra expects states to enforce this gradually. Metals analyst Rakesh Arora mentioned that companies involved in mining in Odisha, Jharkhand, and Tamil Nadu will be impacted. He added that it's likely that every state will enforce this ruling to boost tax revenue.
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