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Context: The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 was introduced in Parliament to establish a uniform, Centre-directed fiscal framework for mining and restrict state-level taxes on mineral rights and mineral-bearing lands.
What the Bill Does
It amends the principal MMDR Act, 1957 to:
- Curb multiple, cascading state levies
- Establish central conditions on mineral taxation
Why now: it responds to the Supreme Court’s 2024 nine-judge Constitution Bench ruling in Mineral Area Development Authority (MADA) v. SAIL, which recognised the constitutional power of states to tax mineral rights and mineral-bearing lands, while holding that royalty is not a tax.
Key Features of the Bill
| Provision | What it does |
|---|---|
| Amendment to Section 2 | Explicitly extends the Central Government’s regulatory control over “mineral-bearing lands” as per prescribed parameters |
| New Section 9D | Prohibits states from imposing any tax, cess or levy on mineral rights or mineral-bearing lands — whether based on quantity, value or royalty — except in accordance with conditions or restrictions prescribed by the Centre |
| Retrospective invalidation | All unpaid or unrecovered dues of state levies from before the amendment are deemed invalid |
| No refunds | State taxes or cesses already collected or deposited by mining companies before the amendment will not be refunded |
| Section 13 — delegated rule-making | Empowers the Centre to frame executive rules specifying the exact parameters, conditions and ceilings under which states may levy mineral taxes |
The two clauses that matter most:
- Section 9D does not abolish the state’s power to tax — it makes that power conditional on central permission. The state may still levy, but only within limits the Centre sets.
- Section 13 is where those limits will actually be written. The Bill itself does not specify ceilings; it delegates that to executive rules. So the real extent of the restriction will emerge later, through rules rather than legislation.
Free · NABARD Grade A
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