Mines defaulted on stamp duty to be shut after July 9

Odisha govt asks miners to pay stamp duty to continue operation under deemed extended clause

In another setback to miners, the state government issued fresh orders that says miners, who are continuing operation under deemed extended clause and have not paid stamp duty as of now, will have to halt mining after July 9 if they fail to pay the duties by that time.

"You are requested not to allow operation of the mines under deemed extension provision unless the payment of stamp duty is made on or before 9 July, 2013," state mines secretary Rajesh Verma wrote to district collectors earlier this week.

So far, about 330 applications of mine lessees are pending for renewal while 52 leaseholders are continuing operations under deemed extension provision including big miners such as Tata Steel, Essel Mining etc.

As per Mineral Concession Rules (MCR), 1960, if a miner has filed an application for renewal of lease agreement a year before the expiry of its validity and his lease has not been renewed by the due date, then the validity of the lease shall be deemed to be extended.

On May 21 this year, the state government issued notification on amendment to stamp duty act, named as Indian Stamp (Odisha Amendment) Act, 2013. The revised act said, miners have to pay stamp duty from the expiry date of mines lease even if the lease is not renewed.

The idea behind such amendment was that while miners were able to excavate minerals without renewal of lease because of deemed extension clause, the state government was not getting revenue towards stamp duties, sometimes for decades, due to notoriously slow process of mines and forest department clearances required for lease renewal.

In the amended act, the state government prescribed that miners operating deemed extension mines have to pay stamp duty soon after the expiry of lease validity, which should be equivalent of 15 per cent total royalty to be paid by the miner. The amount will be deducted at the time of execution of lease agreement. Similarly, if the renewal of mines lease is rejected, then the government has to refund the amount, the new law said.

Many miners have objected the notification, especially to the clause of stamp duty collection at 15 per cent of average royalty. Sources said, not a single miner has so far paid stamp duty, which the government estimates, could boost the revenue collection by Rs 1,000 crore.

The East Zone Mining Association (Ezma) said, such an action would lead to unimaginable damage to the mining industry which is already reeling under sluggish demand.

"No miner has been issued notice by concerned collectors to pay the stamp duty. We had already raised the matter with the steel and mines minister and we have an appointment with him on Friday to discuss about the issue. It is ridiculous that the order came in such a time," said Prabodh Mohanty, spokesperson for Ezma.

Rajnikant Singh, the steel and mines minister, meanwhile, said that if miners request for some more time, then it can be considered.