What decision did the Supreme Court give in favor of mineral rich states?
The Supreme Court has ruled in favor of mineral-rich states. While giving the verdict, a bench of 9 judges said that the states have the capacity and power to impose tax on mineral-rich land. This will benefit Odisha, Jharkhand, West Bengal, Chhattisgarh, Madhya Pradesh and Rajasthan. Let us tell you that the bench of 9 judges has given the verdict 8-1. Hearing the historic verdict on Thursday, the Supreme Court has canceled its earlier order. Also, the right of the states to impose royalty on mining and mineral-use activities has been upheld.
Royalty cannot be considered a tax
Hearing this case, the bench headed by Chief Justice DY Chandrachud said that royalty cannot be considered a tax. The Chief Justice of India said that we believe that both royalty and loan do not fulfill the elements of tax. The decision of India Cements is wrong, which keeps royalty as tax. There is no provision in the MMDR Act to ban the powers of the state government to impose tax on minerals. Let us tell you that the Supreme Court’s decision will benefit the governments of those states where minerals are produced.
Decision given 8-1
The 9-member bench has given the decision 8-1. Justice Nagarathna, who was part of the bench, disagreed with this decision. He said, I believe that royalty comes under the category of tax. States have no legislative capacity to impose any kind of tax or fee on minerals and their rights. I believe that the India Cements decision was taken correctly.
