Mines and Minerals Amendment Bill to boost exploration, critical mineral security
New Delhi, Aug 13
The recently enacted Mines and Minerals Amendment Bill, 2026 will modernise India's mineral governance, strengthen mineral exploration, critical mineral security and sustainable resource development through a stable and uniform fiscal regime, an official factsheet said on Thursday.
The bill would restrict state governments from imposing new taxes on mineral rights and mineral‑bearing lands without conditions prescribed by the Central government, a statement said.
The bill, which has been passed by both houses of Parliament, addressed a heavy and unpredictable tax burden that had made mining commercially unviable in several instances and discouraged extraction.
"No tax, cess or other levy, by whatever name called, shall be imposed by a State Government on mineral rights or mineral-bearing lands. This covers levies based on mineral quantity, mineral value, royalty or any other basis," the statement said.
Any levy not paid or collected by the State before the Amendment applies will be treated as invalid. However, amounts already deposited or recovered before such commencement shall not be liable to be refunded.
The legislation curbs the unpredictable introduction of taxes, cesses and other levies after operations have commenced.
Further, it addresses the problem of multiple levies on production or dispatch of minerals; non‑uniform rates among states; and retrospective imposition of charges.
Additional and unpredictable costs affected small and medium-scale mining operators disproportionately. High and uneven levies pushed industries to avoid local supply chains, creating weaker markets, higher transport costs, and more pollution.
Costlier domestic supply also created a risk of higher mineral imports, despite sufficient local mineral resources.
Multiple and inconsistent taxes caused a cascading tax effect and high compliance costs, slowing down economic growth.
An excessive tax burden at the extraction stage ultimately raises the cost of goods and services for the common citizen.
— IANS
Reader Comments
I hope this doesn't mean states lose their autonomy completely. Mining is a state subject and they need some flexibility. But yes, the unpredictability was killing the industry. Let's see how this plays out in practice.
This is a game-changer for critical minerals like lithium and rare earths. We've been importing too much when we have reserves at home. If this bill boosts domestic exploration, it's fantastic for our Atmanirbhar Bharat dream. 🇮🇳
As someone who's worked in the mining sector across multiple states, I can attest to the chaos caused by differing tax regimes. This uniform fiscal approach will definitely reduce compliance costs and boost efficiency. Good policy direction.
But the provision about not refunding money already collected feels unfair. If those taxes were invalid, why should companies not get their money back? This part needs more clarity, otherwise it seems like a way to let states keep the money.
This is what we needed—predictability. My family runs a small mining operation in Rajasthan, and the sudden imposition of new cesses every year was eating into our margins. Now we can plan long-term and maybe even expand. Thank you, central government!
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