Lok Sabha Question No. 401 (STARRED), answered on 2021-03-24
Subject: Revision of Royalty Rates on Major Minerals
Ministry: MINES
Asked by: Ramesh Chandra Majhi, Manjulata Mandal

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA

## STARRED QUESTION NO. 401 ANSWERED ON 24.03.2021

## REVISION OF ROYALTY RATES ON MAJOR MINERALS

*401. SHRI. RAMESH CHANDRA MAJHI: SHRIMATI MANJULATA MANDAL:

Will the Minister of MINES be pleased to state:

- (a) whether  the  Government  proposes  to  revise  the  royalty  on  major  minerals including Iron ore (other than coal, lignite and sand for stowing) as the same was due for revision in September, 2017 and if so, the details thereof;
- (b) whether the Union Government proposes to enhance rate(s) of royalty in case of Iron / Chromite / Bauxite ores, etc. as per the demand of the State Governments;
- (c) the time by which the decision on enhancement of rate(s) of royalty is expected to be taken;
- (d) whether  the  Government  proposes  to  take  steps  for  exemption  of  the  District Mineral Foundation Funds from incidence of Income Tax with retrospective effect for smooth implementation of Pradhan Mantri Khanij Kshetra Kalyan Yojana; and
- (e) if so, the details thereof?

## ANSWER

THE MINISTER OF MINES, COAL AND PARLIAMENTARY AFFAIRS (SHRI PRALHAD JOSHI)

- (a) to (e):  A statement is laid on the Table of the House.

STATEMENT  REFERRED  TO  IN  REPLY  TO  LOK  SABHA  STARRED QUESTION  NO.  401  REGARDING  REVISION  OF  ROYALTY  RATES  ON MAJOR  MINERALS  RAISED  BY  SHRI  RAMESH  CHANDRA  MAJHI  AND SHRIMATI  MANJULATA  MANDAL,  HON'BLE  MEMBERS  OF  PARLIAMENT FOR REPLY ON 24.03.2021. (a)to(c): In terms of Section 9(1) of the Mines and Minerals (Development and Regulation) (MMDR) Act 1957, every mining lease holder needs to pay royalty for major minerals  removed  or  consumed  as  per  the  royalty  rates  specified  in  the Second Schedule of the MMDR Act, 1957. Royalty is collected and retained by the  State  Governments  concerned.  Proviso  to  Section  9(3)  of  the  MMDR  Act, 1957  stipulates  that  the  Central  Government  shall  not  enhance  the  rates  of royalty  more  than  once  during  any  period of  three  years.  However,  there  is  no provision in the MMDR Act, which mandates the Central Government to revise the rates of royalty for major minerals immediately after completion of three years of  last  revision  of  rates.  Royalty  rates  were  last  revised  on  01.09.2014.  The Central Government revises of rates of royalty from time to time. In  order  to  evaluate  the  revision  of  royalty  rates  and  dead  rent  for minerals  (other  than  coal,  lignite,  sand  for  stowing  and  minor  minerals),  the Ministry  of  Mines  vide  order  dated  09.02.2018  constituted  a  Study  Group.  The Study Group submitted its final recommendation. In the meanwhile, it has been decided  to  constitute  a  committee  to  formulate  a  index  based  mechanism  for valuation of mineral resources and also for pricing for all statutory payments to the Government. The proposal has been approved by the Cabinet on 13.01.2021. (d)&(e):  Yes,  Sir.  Ministry  of  Finance  on  10.9.2020 has  issued  notification u/s 10(46) of the Income Tax Act, 1961, whereby 'District Mineral Foundation Trust' has  been  specified  as  a  'class  of  Authority'covering151  DMF  trusts  for  the assessment  years  2018-19  to  2022-23.  Details  for  172  DMF  trusts  have  been sent  to  Ministry  of  Finance  and  information  for  250  DMF  trusts  are  yet  to  be received from States. 16.03.2021 has requested the Ministry of Finance to amend the notification dated 10.09.2020 for including assessment years 2016-17 and 2017-18 in the existing notification and also to provide that  income tax exemption will continue as long as DMFs are

Further, Ministry of Mines vide communication dated functional.

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