TNIE online desk
The 2026 MMDR amendment covers “mineral-bearing lands” and introduces Section 9D, restricting states from levying taxes, cesses or charges on mineral rights based on mineral value or royalty, except under conditions set by the Centre, giving it greater control over state taxation powers.
In 2024, a nine-judge Supreme Court Bench ruled that royalty is not a tax and states can tax mineral rights. The new amendment seeks to restrict this power, triggering a constitutional dispute.
The financial stakes are high: Jharkhand earned Rs 7,488 crore from its mineral cess in 2025-26, while Karnataka expected Rs 3,000 crore and Odisha has past tax claims exceeding Rs 1 lakh crore. Nationally, outstanding claims are estimated at Rs 1.5–2 lakh crore.
The Centre says varying state taxes raise domestic mineral prices and encourage imports. With India importing minerals worth Rs 10.12 lakh crore in FY26, it argues that a uniform national framework is needed as minerals are consumed across the country.
States argue that the law curtails their constitutional powers over land and taxation. The retrospective provision also invalidates unrecovered mineral-tax demands, prompting states such as Odisha, Karnataka and Kerala to oppose the move and consider legal challenges.