### Supreme Court Greenlights States to Collect Past Mining Royalties Dating Back to 2005

The Supreme Court has approved mining-rich states to collect overdue royalties from mining companies, effective from April 1, 2005. The court’s order specifies that these payments will be spread over a 12-year period. Notably, the bench instructed states not to impose any penalties on the payment of dues.

The Central Government has opposed the states’ demand for a refund of royalties levied on mines and minerals since 1989, arguing it would adversely impact citizens and result in a Rs 70,000 crore drain from public sector undertakings (PSUs), based on initial estimates.

Chief Justice DY Chandrachud announced that this verdict will be endorsed by eight judges from the bench, who largely agreed on the July 25 judgment affirming states’ authority to levy taxes on mineral rights. However, Justice BV Nagarathna will not sign the Wednesday verdict as she had a dissenting opinion in the July 25 ruling.

Last month, the Supreme Court upheld the rights of state governments to impose royalties on mineral-bearing land, asserting their legal competence and authority. The landmark 8:1 decision, led by Chief Justice Chandrachud, clarified that ‘royalty’ is distinct from ‘tax’, with Justice BV Nagarathna providing the lone dissenting opinion.

This ruling is poised to benefit mineral-rich states such as Odisha, Jharkhand, West Bengal, Chhattisgarh, Madhya Pradesh, and Rajasthan, enabling their governments to levy additional charges on mining companies within their jurisdictions.