The mining industry has asked the Centre to address the additional tax being charged by the Indian Bureau of Mines (IBM) on non-coal minerals. In a letter to the Ministry of Mines, the industry body CII said that an average additional amount to the extent of about 20 per cent was being charged over and above the applicable charges.
CII said these charges pertained to royalty, premium, district mineral fund (DMF) and National Mineral Exploration Trust (NMET).
The IBM arrives at the average sales prices for different grades of minerals, other than coal, based on the price declared by merchant miners in respective states in the monthly returns filed before it.
“The price declared in the monthly returns contains the details of amount of royalty, payment towards DMF & NMET paid by the said merchant miners of the particular state. The average sales price declared by IBM includes royalty, DMF and NMET thus the price of minerals for each subsequent month get inflated to that extent,” CII said in its representation.
It further said that the mineral pricing should follow a similar formula as coal wherein the pit-head price is notified by Coal India Limited and is exclusive of royalty, cess, taxes and levies, if any, levied by government and local authorities.
CII cited the provisions of the Mines and Minerals (Development and Regulations)Act under which the mining leases in India for both coal and non-coal are granted and governed. “Royalty is levied under the provisions of Section 9 of the MMDR Act in line with the rates stated in Schedule-II which includes minerals on which the royalty is paid on ad valorem basis.” (in proportion to the estimated value of goods).
The industry body has asked the Centre to address this anomaly. “Ministry of Mines may issue a clarificatory note letter requesting to follow Rule 42 of Mineral Concessions Rules, 1960 and Rule 45 of Mineral Conservation and Development Rules, 2017 to correctly calculate ex mine price,” CII said.
It asked the government that the ex-mine price should exclude all the costs incurred outside the mine area including royalty, DMF, NEMT, premium etc.