The Union Government of India introduced a bill to restrict state taxes, cesses, and other levies on mineral rights in the Lok Sabha [1, 2, 3].
The legislation aims to establish a uniform national framework for mining revenue. This move follows a Supreme Court ruling that had previously favored the authority of state governments to levy mining royalties [4, 1].
The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 [5] seeks to limit the ability of state governments to impose additional charges on mineral rights [1, 2, 3]. Beyond restricting future taxes, the bill intends to invalidate pending and unrecovered levies that states have already attempted to collect [1].
By curbing state-level levies, the Centre aims to reduce the financial burden on mining operators and prevent fragmented taxation across different regions [4]. The proposal expands the central government's control over mineral-bearing land to ensure consistent regulation [3].
The bill was introduced during a Lok Sabha session on Monday, Aug. 9 [1]. The timing of the legislation suggests a push to resolve long-standing disputes between the central government and various states over the distribution of mining wealth [4, 1].
Under the proposed rules, states would lose the power to create independent cesses that could otherwise fluctuate based on local political priorities. This shift centralizes the fiscal authority over India's natural resources, a move that may face resistance from state administrations relying on these revenues [1, 3].
“The bill seeks to restrict state taxes, cesses, and other levies on mineral rights.”
This legislative move represents a significant shift in the fiscal balance between India's central government and its states. By nullifying pending levies and restricting future state taxes, the Centre is prioritizing a streamlined, investor-friendly mining environment over the autonomy of state governments to generate local revenue from their own mineral deposits.
