No mineral rent tax for now, Ministry to state
Bhubaneswar: In a development that could trigger yet another face off between the Centre and the state, the Ministry of Mines has rejected state government`s proposal for a mineral rent resource tax on supernormal profits in iron ore for now.
In a recent letter to Chief Minister Naveen Patnaik, Union minister of state for mines Dinsha Patel said that all the miners are not receiving supernormal profits like state-run miner National Mineral Development Company(NMDC) and the profit can not be generalised as made by NMDC. Hence the tax cannot be levied to all the miners for now.
Iron ore miners are charged a 10% royalty on their ad valorem prices while the royalties, collected by the state, are revised by the Centre once every three year.
According to the Union minister, in the new Mines and Minerals (Development & Regulation) Bill, 2011, the Centre has inserted a provision for setting up District Mineral Foundations wherein every miner would be mandated to pay an equivalent amount of royalty as part of the profit-sharing mechanism.
The letter denying the proposed tax on the lines of Australia however suggested that the District Mineral Foundations would be a better alternative for mineral rent resource tax.