Mining Company Share: The shares from Tata Steel Limited, MOIL Limited, and NMDC Limited fell on Wednesday following the Supreme Court’s decision on the capability of states to impose taxes and royalties on mining.
It was the Supreme Court, while giving the financial relief needed by the states with mineral wealth, that allowed them to collect the tax and royalty due on behalf of authorities like the Central Government on Wednesday and leaseholders on their mineral-rich land starting April 1st in 2005.
The steel giant faces a 3.6 per cent drop and reached Rs 144 after the Supreme Court tax ruling.
In the wake of this ruling, the share of Tata Steel fell by more than 5 per cent on Wednesday and sank to an intraday low of Rs 146.
In the same period, the share of MOIL Limited dropped by around 6 per cent and reached the intraday lowest of Rs 404.80.
The stock of NMDC Limited also saw a drop of more than 6 per cent and the share of the company was trading at 211 rupees.
What Is The Detail?
The Supreme Court said there would be a few conditions to pay prior dues. The mining firms and the Centre can pay fees to states that are rich in minerals in a progressive manner over the next twelve years.
The court however directed states not to apply any penalties on the payments of dues.
The Centre has fought the demand to return the royalty paid on minerals and mineral-rich lands to states that are mineral-rich since 1989, arguing that it would be detrimental to the people of the states.
Based on initial estimates, the public sector corporations (PSUs) will be required to take out the sum of Rs 70,000 crore from their Treasury.
CJI Chandrachud declared that the decision will be ratified by eight judges from the bench, who handed down an overwhelming decision on the 25th of July, in which states were given the legal right to charge a tax on mineral-rich land.
What Is The Matter?
The court had ruled in a majority ruling of 8:1 on 25 July that states have the power to impose taxes on mineral-rich land and mines, and that the royalty paid for minerals is not tax.
This ruling overturned the 1989 ruling which stated it was only the Centre could assess royalty on mineral deposits or mineral-rich land.
After this, a few mineral-rich states ruled by the opposition requested reimbursement of royalty imposed by the Centre and tax collected from mining companies since the decision.
The issue of refunding royalty was considered on July 31, and the decision was reserved.
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