The government’s proposal to impose 26 per cent tax on profits from coal mining and 100 per cent royalty on other minerals would make Indian mining and mineral based industry heavily taxed and render it uncompetitive, industry body Assocham has said. The group of ministers (GoM) recently proposed these measures for the project-affected people under the district mineral development fund and incorporating it in the new mining bill.
Instead of 100 per cent royalty contribution, Assocham, in a release said, mining companies could be asked to make a one-time upfront payment of 26 per cent of the market value of land at the time of grant of mining lease. Alternatively, an amount less than 10 per cent of the royalty by a mining lease holder and a matching contribution by the state government might be considered, the apex trade body said.
“When these funds are utilised, the percentage of royalty required to be paid may be increased,” it said.
The GoM’s royalty proposal would lead to an annual revenue loss of Rs 6,000 crore to the government on account of various taxes like income tax, dividend distribution tax, dividend and disinvestment collections, Assocham said. Besides, valuation loss of public sector companies like CIL, MOIL, SAIL, MNDC, NALCO and others could be a cumulative Rs 75,000 crore, it said.
Similarly, the total valuation loss of private companies like Hindalco, Balco, Sesa Goa, JSW and others could be to the tune of Rs 25,000 crore, Assocham added.
