The Supreme Court is currently examining over 80 appeals regarding whether the royalty charged on mining qualifies as a tax and if states have the authority to levy taxes on minerals.
Representatives of mining companies argued against states imposing taxes on mineral rights, stating that such taxation falls under the purview of the central government's authority over mineral development. They contended that allowing states to impose additional financial burdens on private miners would hinder mineral development.
The nine-judge bench, led by Chief Justice Dhananjaya Y Chandrachud, is deliberating on the validity of state laws regarding taxes on mineral rights. The discussions revolve around the interpretation of constitutional provisions related to mineral development and taxation.
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This issue holds significant implications for states' revenue and their authority over minerals extracted from their land. The Supreme Court's involvement stems from conflicting judgments in previous cases regarding the nature of royalty charged on mining activities.
The matter was referred to the current nine-judge bench in March 2011 due to discrepancies between two earlier verdicts. One ruling in 1989 categorized royalty as a tax, while another in 2004 suggested that the previous judgment had misinterpreted the nature of royalty.
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As the debate continues, the court seeks to clarify whether states have the legislative competence to levy taxes on minerals and mineral-bearing lands, particularly in addition to the royalty imposed by the central government. The outcome of these deliberations will have far-reaching implications for both mining companies and state governments across the country.
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