The Supreme Court has ruled that states can levy taxes on mineral rights, but clarified that the tax should not be applied retroactively before April 1, 2005. The court also allowed for a staggered payment plan for tax arrears over 12 years starting April 1, 2026, and waived interest and penalties for the period before July 25, 2024.
The Indian government is opposing a demand from mineral-rich states for refunds of royalty payments made since 1989. This comes after a landmark Supreme Court ruling that affirmed states’ authority to levy taxes on mineral rights. The Centre argues that applying the ruling retroactively would have significant financial implications.
