Additional state taxes on minerals will affect country's economy: Solicitor General | India News

New Delhi: To ease lingering doubts Supreme Courtmind about Authority of the Centre In a bid to prevent states from imposing taxes on key minerals, the Center on Tuesday told a nine-judge bench headed by the Chief Justice that the Mines and Minerals (Development and Regulation) Act passed by Parliament excludes states from the jurisdiction to impose taxes on national minerals. resources.
A bench comprising Chief Justice DY Chandrachud and Justices Hrishikesh Roy, AS Oga, PV Nagaratna, JP Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish C Sharma and Augustine G Masih repeatedly asked the government to show the law or provision of the Constitution which has imposed the ban on the states. Tax on major minerals. Solicitor General Tushar Mehta said negative provisions are never inserted in taxation laws to prohibit states, but the general tendency is to „encroach upon a sector by central law to usurp the jurisdiction of states”.
The MMTRA is a comprehensive index that provides what states can earn from major minerals in addition to royalties, and warns that if states are allowed to go back to the pre-1989 status, 500% royalty on major minerals will be levied. Enriching the states with coal, iron ore, bauxite, chromium and some other mineral resources creates a skewed economic growth within the country.
India's tax rates on key minerals range from 59% to 61%, one of the highest in the world under the current royalty-based regime, Mehta said. Mehta said if states imposed higher taxes, these minerals would become uncompetitive in the global market, reducing exports and increasing imports, which would push inflation northward and hurt the domestic economy.
„If states foolishly impose high taxes on minerals, their natural resources will not be sold, and consuming industries will start importing from outside. State revenues will decrease and they will realize their mistake in two or three years.”
Mehta said, „What will happen to the country's economy in those two or three years? Who will repair the damage to the national economy and sink in foreign exchange earnings? It will be disastrous. That is why the Union, not the states, has been given the power to develop and regulate major minerals for public and national interest.”

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