India Clears Law To Curb New State Taxes On Mining

India’s parliament on Thursday passed legislation aimed at restricting state governments from imposing new taxes, cesses or other levies on mineral rights and mineral-bearing land. Such charges will only be allowed under conditions set by the federal government, as New Delhi seeks to establish a more uniform fiscal framework for the mining sector.

The government said the existing system had resulted in multiple taxes and levies, varying rates across states and retrospective demands, creating uncertainty for mining companies and investors. The new law is intended to reduce these inconsistencies and ease the fiscal burden on the mining industry.

The legislation will also expand the federal government’s regulatory oversight to mineral-bearing lands containing mineral resources, beyond its existing role in mine regulation and mineral development. It further provides that unpaid or uncollected levies previously sought by state governments will be invalidated once the law comes into force.

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