Supreme Court Rules 8:1 That States Can Tax Mines and Minerals, Royalty Not a Tax

Jul 25, 2024, 05:41 AM

In a landmark decision, the Supreme Court of India, in an 8:1 majority verdict, has ruled that states have the legislative competence to levy taxes on mines and minerals bearing lands under the Constitution. The nine-judge Constitution bench clarified that the royalty payable on minerals under the Mines and Minerals (Development and Regulation) Act, 1957 is not a tax. Chief Justice D Y Chandrachud, along with seven other justices, supported the majority decision, while Justice B V Nagarathna delivered a dissenting opinion. The court also stated that the 1989 verdict of its seven-judge Constitution bench, which held that royalty on minerals is a tax, is incorrect.