BENGALURU: The state government, which was expecting to generate around Rs 4,700 crore by passing the Karnataka (Mineral Rights and Mineral Bearing Land) Tax Bill, 2024, might be disappointed. Governor Thaawarchand Gehlot, who had earlier sent the bill back to the government seeking clarifications, has now given his nod and sent it to the President of India.
The Bill had made provision to collect tax on exercise of mineral rights and on mineral-bearing land by the State government. The Governor, in his letter, noted that the provision in this bill will have an impact on earlier parliamentary laws/central acts such as Environmental Protection Act, Forest Conservation Act and Mines and Minerals Act.
In his file to the State government, the Governor pointed out that mineral bearing lands fall under notified forest and non-forest areas. As far as forest land for non-forest purposes in considered, the Forest Conservation Act was passed in Parliament in 1980. Thus, land covered under notified forest areas and its use is controlled and governed by parliamentary legislation.
The Governor also mentioned that the objective of the Bill appears to transgress other constitutional limitations and provisions. He added that in this case, the Bill which ultimately became the Act in question, was a consolidating Act relating to different subjects, and perhaps the Governor felt it was necessary to reserve it for the President’s assent.
The Bill passed in the House stated it is in accordance with the Supreme Court’s verdict dated August 14, 2024, that says states can collect mineral taxes on mineral bearing land and mineral rights with retrospective effect from April 1, 2005. Mining leaseholders are allowed to pay this tax in instalments.
The Bill was passed in both Houses during the winter session in Belagavi. The bill says the State considers making provisions for levy and collection of tax on exercise of mineral rights and on mineral bearing lands by the State government. When the bill was sent for the Governor’s approval, he had returned it, seeking clarificiations.
The Bill had fixed rates of tax on mineral bearing land like bauxite and laterite, chromite, iron ore, limeshell, magnesite and others, and the tax amount varied from Rs 20 per tonne to Rs 100 per tonne. The state had expected to raise Rs 4,708 crore annually.