Royalty on minerals to incur 10 pc cess: govt

 
The proposal for the levy is part of a draft bill being formulated to replace the Mines and Minerals Development Regulation Act (1957), a senior ministry official told PTI.

“The Centre and the State government may levy and collect a cess on major and minor minerals respectively, at a rate not exceeding 10 per cent of the royalty in such a manner as may be prescribed,” the official said.

The proceeds would go to the proposed ‘National Mineral Fund” and “State Mineral Fund’ for promoting scientific management of mining and mine closure, local development and preventing illegal mining among others, the official added.

The mining industry, however, has opposed such a levy, saying it would hit hard the margins of firms which have already been asked to pay up to 10 per cent royalty on the market price of minerals such as iron ore.

Industry analysts say the cess, estimated to mop up around Rs 1,500 crore, would be an extra burden on the mining firms and may push up the cost of vital minerals.