Parliament passes mines bill restricting states mineral tax powers
Mangalore Today News Network
New Delhi, Aug. 14, 2026: Parliament on Thursday passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, a legislation aimed at restricting the powers of state governments to impose taxes on mineral rights and mineral-bearing lands.
The Bill was cleared by the Lok Sabha on Wednesday and received approval from the Rajya Sabha on Thursday. It will come into effect after receiving the President’s assent.
Replying to a debate in the Rajya Sabha amid protests by Opposition members, Union Mines Minister G. Kishan Reddy said the legislation does not infringe upon the autonomy or revenue rights of states. He said the objective is to ensure a uniform framework for mineral taxation and regulation across the country.
Under the proposed law, the Centre will continue to regulate major minerals such as coal, iron ore, limestone, copper and manganese, while state governments will retain authority over 49 minor minerals.
The amendment to the MMDR Act specifies that state governments will not be permitted to levy any tax, cess or similar charge on mineral rights. It also bars states from imposing levies on mineral-bearing lands based on factors such as quantity, value, royalty or other parameters, except in cases specifically authorised by the Central Government. A new provision will be inserted in the Act to give effect to these restrictions.
The Bill further states that any such tax that has not been collected or recovered before the amendment comes into force will be treated as invalid. However, taxes and levies already collected by states will not be refunded.
Reddy said states’ share in mineral revenues has increased significantly over the years, rising from 65 per cent in 2014-15 to 85 per cent at present. He added that states now receive 96 per cent of coal revenues compared to 51 per cent earlier, while the Centre’s share of overall mineral revenue stands at around 11 per cent. He maintained that the new law would not result in revenue losses for any state.
Referring to Entry 54 of the Union List, the minister said taxation is an important instrument for regulating the mining sector in the larger public interest. He also noted that coal continues to account for nearly 73 per cent of India’s electricity generation.
The debate took place amid continuous sloganeering by Opposition members demanding the presence of Union Home Minister Amit Shah to discuss police action against students protesting the alleged medical entrance examination paper leak. An amendment moved by DMK member Tiruchi Siva seeking referral of the Bill to a Select Committee was rejected by a voice vote.