Parliament approved the Mines and Minerals Amendment Bill, 2026 on Thursday, establishing a uniform fiscal framework for mining taxation across the nation. The legislation empowers the central government to regulate state taxes on mineral rights, addressing what the Centre termed excessive fiscal burdens that were making mining operations commercially unviable. According to the Mines Ministry statement, the amendment will not affect states' rights on land and minerals or any tax on minerals collected by the states, while ensuring global competitiveness within the mining sector.
The Centre on Friday clarified that states will continue to receive around 90% of total taxes and statutory payments from mining operations even after the implementation of the Mines and Minerals (Development and Regulation) Amendment Bill, 2026. According to the Mines Ministry statement, the amendment will not affect states' rights on land and minerals or any tax on minerals collected by the states. This clarification addresses concerns raised by mineral-rich states over the legislation's fiscal impact on their revenue streams.
Between FY2015-16 and FY2025-26, major mining states received more than ₹5 lakh crore from the mining sector, while the Centre's share during the same period stood at around ₹82,000 crore. As reported by the ministry, states currently impose around 14 types of taxes, charges, fees and other levies on mining operations, including royalty, auction premium, dead rent, District Mineral Foundation (DMF) contributions, goods and services tax (GST) and transit fees. The ministry highlighted that states which have taken lead in auction and operationalisation of auctioned blocks have seen exponential rise in their revenues.
Kerala Chief Minister VD Satheesan announced formal protest and exploration of legal remedies against the Centre's mining law amendments, arguing that the changes erode constitutional powers and cause revenue losses. The state plans to register its protest and explore legal remedies, with Kerala citing that the amendment invalidates state levies not yet deposited or recovered. The opposition comes as Kerala argues that these changes represent a significant encroachment on state fiscal autonomy, with the state's Mineral Bearing Land Cess expected to generate around ₹11,000 crore annually.
The Centre has argued that differences in state-level levies increase the cost of minerals and can make domestic production less competitive. According to the ministry, India imported minerals worth ₹10.13 lakh crore in FY2025-26, and unbalanced imposition of steep taxes could increase dependence on imports and burden the exchequer. The ministry noted that between FY2020-21 and FY2025-26, major mining states collected more than ₹96,000 crore in auction premiums, in addition to other revenue sources such as royalty, DMF and GST.
