The Supreme Court has decided that its ruling, which confirms the states’ right to tax mineral rights, will be retroactively applied from April 2005. This means states can now collect overdue royalties and taxes from that date. However, the court denied the Mineral Area Development Authority’s request to implement these charges only from now on. The Court upheld the states’ power to levy taxes and royalties on minerals alongside federal taxes.
Following the ruling, shares of Tata Steel, MOIL, and NMDC dropped on Wednesday as they will be required to pay past mineral taxes and royalties dating back to April 2005. The Court’s decision includes a phased payment plan over 12 years starting April 1, 2026.
Tata Steel had previously set aside ₹17,300 crore to cover potential claims from Odisha if the taxes were applied retroactively.
Impact on Private Companies:
• Legal experts predict a potential demand exceeding ₹1 lakh crore.
• Tata Steel has already set aside ₹17,347 crore as a precaution.
• This ruling is expected to negatively affect Vedanta, Hindalco Industries, JST Steel, Tata Steel, and cement companies.
Impact on Public Sector Undertakings:
• Legal estimates suggest an impact of ₹70,000-80,000 crore.
• This is expected to negatively affect Coal India, Hindustan Zinc, NMDC, Hindustan Copper, MOIL, NALCO, NMDC Steel, and SAIL.
Who Benefits?
• States rich in minerals will benefit the most.
• Key beneficiaries include Odisha, Jharkhand, and Rajasthan.
• Other states like Maharashtra, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Goa, West Bengal, Uttar Pradesh, Assam, and Delhi will also gain.
Stay informed with our financial updates, stocks, bonds, commodities. Get global & political insights. Follow us & enable notifications for the latest updates.
