On Wednesday, the Supreme Court empowered states to levy retrospective taxes on minerals, a decision likely to impact the country’s mining industry with a Rs 1.5 – 2 trillion arrears shock, according to industry estimates. Multiple major companies have stated they do not see any significant immediate impact from the order’s retrospective nature. Industry executives and analysts, however, agree what states do next would be an important factor to watch for.
Odisha, Rajasthan, Chhattisgarh, Karnataka and Jharkhand — are India’s top five mineral producing states by value annually, and in the same order as of FY23 data. Of these, Jharkhand was quick to announce a new cess on different minerals mined from the state, on close heels of the July Supreme Court order. Industry executives and analysts noted, they do not expect the Jharkhand cess to be a major hit due to comparatively lower volumes. However, of the other mineral-rich states, Odisha is the state they would watch out for any similar move, with a lion share of more than 40 percent in the total value of minerals produced in the country. (See chart.)
First Published: Aug 15 2024 | 10:41 PM IS