New Delhi, Aug 13 : Parliament on Thursday passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, curbing the power of state governments to impose taxes, cess and other levies on mineral rights and mineral-bearing lands.
The Rajya Sabha cleared the Bill a day after it was passed by the Lok Sabha. The legislation seeks to establish a more uniform fiscal framework for the mining sector and provide greater certainty to mining companies.
A key provision of the amendment is the insertion of a new Section 9D, under which states will not be allowed to impose taxes, cess or other levies on mineral rights or mineral-bearing lands based on the quantity or value of minerals, royalty payable or any other such basis, except in accordance with conditions or restrictions prescribed by the Centre.
The legislation also seeks to invalidate taxes, cess and other levies imposed by states before the commencement of the 2026 amendment that have not been deposited or recovered.
However, amounts that have already been deposited with or recovered by state governments will not have to be refunded.
The amendment comes against the backdrop of a landmark 2024 Supreme Court ruling by a nine-judge Constitution Bench, which held that states have the power to levy taxes on mineral rights and that the Mines and Minerals (Development and Regulation) Act, 1957, does not restrict such powers.
The Supreme Court had also declined the Centre’s request to make the ruling prospective and allowed states to recover past dues dating back to April 1, 2005.
In its statement of objects and reasons, the Centre said differing state-level taxes and levies had created uncertainty for the mining industry through multiple charges, varying rates, unpredictable taxation and retrospective levies.
The government argued that excessive and unpredictable fiscal burdens could make mining operations commercially unviable, discourage mineral extraction and increase the cost of goods and services.
The amendments, it said, are aimed at providing certainty, stability and predictability to the mining sector.
The Bill was introduced by Coal and Mines Minister G. Kishan Reddy. The new law will come into force from a date to be notified by the Central Government in the Official Gazette.
