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In a significant development, the Centre has informed the Supreme Court that efforts are underway to resolve the long-standing issue of recovering mining royalty and tax dues from certain states. This move comes as part of a broader strategy to address the complex legal and financial implications arising from recent Supreme Court judgments on mining rights and royalties.
The Supreme Court has been at the forefront of shaping the legal landscape regarding mining royalties and taxes. In a landmark judgment, the Court allowed states to collect past dues on royalty and taxes on mineral-bearing land from April 1, 2005, onwards. This decision was made possible by a nine-judge Constitution bench, which clarified that states have the authority to levy cess on mining activities and that the royalty paid to the Central government is not a tax[1][2].
The retrospective application of this judgment has significant economic implications for mining companies and states. It could lead to a substantial financial burden on mining industries, potentially affecting their operational viability. The staggered payment plan aims to mitigate this impact by spreading the financial obligations over a decade[1][3].
In response to these challenges, the Centre has initiated efforts to settle the royalty and tax dues with certain states. This approach involves setting up a bench to hear states' pleas on recovering these dues from the Centre and mining firms. The Supreme Court has agreed to this proposal, deferring the hearing to April 24, 2025[4][5].
The ongoing efforts to resolve the mining royalty and tax dues issue reflect a complex interplay of legal, economic, and political factors. As the Centre and states work towards a resolution, the focus will remain on balancing the financial interests of mining companies with the revenue needs of states. This process will be crucial in shaping the future of India's mining sector and ensuring sustainable development in mineral-rich regions.