Supreme Court: ‘SC move will help state make massive revenue’ | Bhubaneswar News
Bhubaneswar: Supreme Court’s recent order allowing states to impose tax on mineral-bearing land could help mineral-bearing states such as Odisha to make massive gains in tax revenue.
Former finance minister Panchanan Kanungo said they have been fighting for this. “Once in 1992, our state had gone to the Centre and then the Supreme Court to allow mining tax on mineral-bearing land, but the Centre had turned down the request.They said that mining is only in the control of the Centre. Now the Supreme Court has brought clarity to the matter,” Kanungo said.
He said the state govt should initiate the process to impose tax on mineral-bearing land. “When I was the finance minister in the BJD govt between 2002-2004, we had set up the Sanjeev Hota committee on the mining issue. It had recommended that state should collect tax on mineral-bearing land, but it could not be implemented,” he added.
The former minister said the state govt in 2004 had enacted the Odisha Rural Infrastructure and Socio-Economic Development (ORISED) Act. It had sought to levy tax on mineral-bearing lands, but the Orissa high court had struck it down. “My calculation says Odisha may get around Rs 50,000 crore annually if it imposes tax on mineral-bearing land,” Kanungo said. Bibhu Prasad Tripathy, joint general secretary of the Bar Association of India, said the state govt can now start implementing the Supreme Court order.
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The Supreme Court ruled in an 8:1 decision that states can collect royalties and impose additional taxes on mineral-rich lands, excluding oilfields. The decision could significantly benefit mineral-rich states. The judgment addressed a long-standing issue over states’ rights to revenue from extracted minerals.
The Supreme Court ruled that states could impose taxes on mines and mineral-bearing lands, with a nine-judge bench led by Chief Justice DY Chandrachud determining that royalty payable on minerals is not a tax. This overturned a 1989 ruling that considered royalty a tax, following inconsistencies in judgments from different high courts.
Justice B V Nagarathna dissented against eight judges who supported states collecting royalty on minerals and taxing mineral-bearing land. She argued that royalty is a tax that should not be imposed by states, highlighting potential economic and federal structure impacts. Justice Nagarathna’s dissent aligned with the Centre’s stance, emphasizing nationwide uniformity in mineral development to prevent unhealthy competition among states.
