Mineral-rich states score big court victory, can now collect past royalty dues.

The Supreme Court recently ruled on the issue of levies on mines and minerals by state governments. The court upheld the states’ right to impose levies and directed that these payments be staggered over 12 years. However, the court also directed the states not to impose any penalties on the payment of these dues. The Centre opposed the demand for a refund of royalties imposed since 1989, citing potential negative impacts on citizens and public sector units.

This opposition was based on an estimated cost of Rs 70,000 crore to PSUs. The bench, led by Chief Justice DY Chandrachud, delivered a landmark 8:1 verdict upholding the states’ competence and power to levy royalties, distinguishing them from taxes. Justice BV Nagarathna delivered the dissenting verdict. This ruling is expected to benefit mineral-rich states such as Odisha, Jharkhand, Bengal, Chhattisgarh, Madhya Pradesh, and Rajasthan, as they now have the authority to impose additional levies on mining companies operating within their territories.