Parliament passes Mines and Minerals Amendment Bill, empowering Centre to regulate state mining levies

Synopsis

Parliament approved the Mines and Minerals Amendment Bill, 2026, on Thursday. This legislation empowers the central government to regulate state taxes on mineral rights. Excessive fiscal burdens were cited as a reason for the new restrictions. The move follows a Supreme Court verdict allowing states to levy additional mining taxes. A uniform fiscal framework will guide future mining tax impositions across the nation.

Parliament passes Mines Bill 2026

The Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, Thursday. Both houses gave their nod to the bill by voice vote. This amendment allows the centre to regulate state governments’ powers to impose taxes, cess or other levies on mineral rights or mineral-bearing land.

Speaking to journalists after the Rajya Sabha passed the bill, mines minister G Kishan Reddy said excessive fiscal burdens make mining operations commercially unviable, discourage mineral extraction, adversely affect mineral production and, in some cases, lead to mine closures. Responding to concerns raised by opposing members of parliament that this contravenes constitutional provisions, Reddy said the centre will get no share of the mining tax proceeds and the states will continue to be the primary beneficiaries.

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ET reported on January 1, 2025, that the Centre was planning to curb excessive mining taxes imposed by states.

The move to impose these restrictions follows a 2024 Supreme Court verdict allowing states to levy additional taxes on mining operations in their territories. The verdict was followed by fresh mining taxes in Karnataka, Jharkhand and Tamil Nadu.

According to Reddy, any fiscal burden imposed on mineral extraction should be guided by a uniform and balanced fiscal framework across the country. He said the framework for putting these guardrails on states will be put in place.

“The cumulative incidence of different levies should not become disproportionate to the economic value and profitability of the mining operations,” Reddy had said while introducing the bill in the Lok Sabha.