“Royalty is not Tax”: Supreme Court says MMDR Act no Limitation on States to Levy Taxes on Mineral and Mining

The Supreme Court of India has ruled that royalty payments for mining are not classified as taxes. This decision came from a nine-judge bench led by Chief Justice DY Chandrachud, clarifying that states have the authority to levy taxes on mineral rights under the Mines and Mineral (Development and Regulation) Act (MMDR Act). The bench addressed petitions challenging additional taxes imposed by states on mineral-rich lands. The Court emphasized that the power to tax mineral rights remains with states and is not subject to federal limitations unless explicitly stated by Parliament. This ruling impacts the revenue from mineral extraction in states like Jharkhand and Chhattisgarh, potentially affecting central oil companies as well