Mines Min forms expert group to revise royalty on minerals
Mines Ministry has formed an expert group to review royalty rates for all major minerals other than coal, lignite and sand, due for revision next year.
September 15, 2011 / 22:40 IST
Mines Ministry has formed an expert group to review royalty rates for all major minerals other than coal, lignite and sand, due for revision next year.
The 17-member study group, which will submit its report in six months, will not only take into account the present Act governing royalty, but also the new mines bill which is likely to be tabled in the next session of Parliament."We are very happy to constitute this group, whose approach will be innovative. It will not only review the royalty rates based on existing Act but will also recommend royalty as per the new mines Bill and the mechanism for its computation," Mines Secretary S Vijay Kumar told PTI.There are 51 minerals prescribed in the second schedule of the MMDR Act 1957 and the rates vary from mineral to mineral. The royalty on iron ore is 10% at present.Almost all minerals including bauxite, limestone, zinc and copper would be impacted by new royalty rates.The committee will also recommend royalty as per the Mines and Mineral Development and Regulation (MMDR) Bill, 2011 taking into account the liabilities on the lease holder, in the event of Parliament approving it, Kumar said.The next upward revision in royalty rates is due in August 2012. Rates are revised every three years and the last revision was done with effect from August 13, 2009.Royalty is a tax levied by government on miners in lieu of transfer of ownership rights of mines. While the government views it as a source of revenue, industrialists look at it as part of production costs.The study group, headed by Additional Secretary Mines Sanjay Srivastava, will comprise 15 members. It will have a Director of Ministry of Mines as convener.The members will include industry representatives like Secretary General, FIMI, Director General, Confederation of Indian Industry, Secretary General, FICCI and Secretary General, ASSOCHAM besides Controller General, Indian Bureau of Mines.Besides, Mines Secretaries of Jharkhand, Karnataka, Orissa, Chhattisgarh and Rajasthan have been inducted in the Group as members, Kumar said. Representatives of the Ministries of Finance, Coal, Steel, Atomic Energy, Government of India, will also be members of the group.The central Government has been vested with powers under Mine and Minerals (Development & Regulation), Act, 1957 to enhance or reduce the rate at which royalty should be payable in respect of any mineral.The new Mines Bill MMDR 2011, approved by a ministerial panel headed by Finance Minister Pranab Mukherjee in July this year, provides for 26% profit-sharing with the project-affected people by coal mining companies.Non-coal miners will have to pay the displaced people an amount equivalent to royalty they pay to the state government. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
