The Karnataka government presented the bill to impose tax on mines and mining lands. The Cabinet approved the Karnataka ( Mineral Rights and Mineral Bearing Land ) Tax Bill, 2024. The bill was brought in by citing the Supreme Court judgment that held that states can collect mineral taxes on mineral-bearing land and mineral rights with retrospective effect from April 1, 2005.
As per the Bill, different rates of taxes can be levied by the state government based on the category of the mines. However, a uniform rate of tax is proposed for the mining leases which are falling under the same category.
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Through the introduction of the bill, the Government estimated an additional revenue of more than Rs 4,700 crore. The Mining leases in karnataka were divided into five categories based on the method of the grant and payment of additional amounts. The categories were those granted through the non-auction route before 2015, those granted to central or state public sector units before 2015 that have not completed 50 years, those granted to central or state PSUs before 2015 that have completed 50 years, those granted to central or state PSUs after 2015, and those auctioned after 2015.
The clauses introduced in the Bill empowers the Government to make rules regarding the rate of tax to be paid retrospectively from April 1, 2005, for mineral-bearing land and from January 12, 2015, with respect to mineral rights. The Government can also make rules regarding the methodology for determining the taxes, while providing mining companies with avenues for appeal.
The Bill provides for paying tax payable by the lease holder during the dispatch of minerals. If the taxes are not paid at the time, the Government can levy a simple interest of 12 per cent until they are paid.
Till now an estimate of Rs 4,207.95 crore revenue is generated through mineral rights tax. An extra of Rs 505.9 crore is expected tol be raised by levying taxes for mineral-bearing land.
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