Mining sector: Section 9D & the States’ power to tax minerals

In July 2024, a nine-judge Constitution Bench of the Supreme Court delivered a landmark ruling in Mineral Area Development Authority v. Steel Authority of India Ltd., holding that royalty is not a tax and affirming that States possess an independent constitutional power to levy taxes on mineral rights and mineral-bearing lands.

However, the landscape has shifted significantly with the introduction of Section 9D under the Mines and Minerals (Development and Regulation) Amendment Act, 2026. The provision seeks to prohibit States from imposing any tax, cess, levy or similar charge on mineral rights or mineral-bearing land, except to the extent expressly permitted by the Central Government. The amendment raises critical constitutional and fiscal questions like:

• Can Parliament curtail States' taxing powers?

• Can Parliament curtail States’ power to recover past levies which were valid before the current amendment?

• Does Section 9D survive constitutional scrutiny?

• What is the impact on existing State levies?

• Can States still recover revenue through regulatory or service-based fees?

We examine the constitutional validity, practical implications and future of mineral taxation in India. The webinar will inter-alia cover:

• Section 9D decoded: Scope, Central control, and retrospective impact on State levies.

• 2024 SC ruling: Royalty not a tax; States' taxing powers and implications.

• Legislative overlap: Mineral rights taxation vs. land taxes and mining regulation. Minor minerals exceptions 

• Tax vs. Fee: Can States still levy fees after Section 9D? (Jalkal-SC)

• Impact on levies: Royalty, auction premiums, DMF, transit fees, and cesses.

• Practical fallout: Assessment, recovery, and compliance strategies. 

Speakers -

Charanya Lakshmikumaran, Executive Partner
Asish Philip, Executive Partner
Kunal Kapoor, Partner