The Indian government has opposed a request from mineral-rich states to receive a refund of royalty payments levied since 1989. The government argues that such a decision would have far-reaching consequences.
This opposition comes after a landmark Supreme Court ruling in July 2023, which declared that states, not the central government, have the right to tax mineral rights. This decision, which granted significant revenue gains to mineral-rich states, has sparked a new debate over its implementation.
Some states, mainly ruled by opposition parties, have pushed for the ruling to be applied retroactively, allowing them to seek refunds from the central government. However, the government opposes this move, claiming it would have a significant impact on various sectors. Many mining companies also support the government’s stance on the issue.
The Solicitor General argued that BJP-ruled states like Madhya Pradesh and Rajasthan are in favor of a prospective application of the ruling.
The court hearing on this matter is ongoing. The Supreme Court’s ruling clarified that royalty payments are not taxes but contractual payments for mineral rights. However, one dissenting judge argued that the central government does have the power to levy royalty.
