Team Herald
PANJIM: The Goa Chamber of Commerce and Industries (GCCI) has expressed concern regarding the possible impact of the recent ruling by the Supreme Court of India empowering the State governments to impose additional taxes and levies on the mining of minerals, retrospectively from 2005.
The possible impact would be change of goalpost particularly when the auction regime is in vogue post enactment of MMDR (Amendment) Act in 2015, while creating an uncertainty in the mineral taxation regime of the country. It may adversely impact the downstream industries and lead to mining cost push inflation affecting the entire economy, it said.
While the GCCI respects the Apex Court's decision, it believes that the decision could have devastating consequences in future, for the mining industry in the country as a whole including Goa, which is yet to recover from the after effects of mining ban in February 2018 and consequently, the State economy and residents who are eagerly awaiting the resumption of mining in the State.
The iron ore mining in Goa has just begun and/or looking forward to resume its operations after a long gap of six years - it is in everybody’s knowledge that after the change of mining regulations in 2015, the mining companies are required to pay a substantial amount in the form of auction premium for winning the bid, besides other statutory dues like Royalty, DMF/NMET contributions, etc. The imposition of further taxes/ cess/ levies, if any, as permitted by the ruling, will further impact the economics of mining operations possibly making it unviable with its natural consequences.
Additionally, the increased cost of mining will inevitably lead to higher prices for essential commodities e.g. steel, power, cement, etc. further fuelling inflation and consequential impact on the nation’s economy. The ruling also raises a deep concern of India becoming import-dependent for minerals, in view of locally produced mineral becoming uncompetitive, despite having abundant reserves. Due to higher taxes on domestic production and cheaper imported raw material becoming the choice for the industry may become a matter of deep national concern, the Chamber said.