Bhubaneswar: Tata Steel may have to pay Rs 17,300 crore to Odisha as mineral tax if a July 25 Supreme Court judgement allowing levy of mineral tax by states is implemented with retrospective effect. The disclosure was made by the company in an exchange filing on July 31.
The major contention lies in the implementation of the tax, with Odisha advocating a retrospective effect, while the Centre favouring a prospective application.If the tax is applied retrospectively, as demanded by Odisha, Tata Steel would be obligated to pay the aforementioned amount as arrears.
Odisha had introduced “Orissa Rural Infrastructure and Socio-Economic Development Act, 2004 (ORISED Act)” with effect from February 1, 2005, levying tax on mineral-bearing land. Challenging the Act, Tata Steel had filed a writ petition in Orissa high court, questioning the constitutional validity of the Act.
The high court in December 2005 had held that the state does not have the authority to levy tax on minerals. Odisha had subsequently challenged the judgment in Supreme Court.
“Pending clarity on the period of applicability of the levy, the company, in line with previous years, continues to include the aforementioned demand along with the impact of the estimated amount till June 30, 2024, aggregating to Rs 17,347 crore, as contingent liability in its standalone and consolidated financial statements,” Tata Steel submitted before the stock exchanges, NSE and BSE.
During a hearing in Supreme Court on Wednesday on whether its verdict will be implemented retrospectively, Odisha and Andhra Pradesh have sought its implementation, retrospectively. Odisha advocate general Pitamabar Acharya had told the court that if the tax is levied with prospective effect, the state will lose substantial revenue.

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