Coal India Ltd. and Tata Steel Ltd. are two metal companies that are likely to be impacted by the "Jharkhand Mineral-Bearing Land Cess Bill 2024", which was passed by the state assembly on Aug. 2.
The bill proposes tax rates for different minerals on a per-metric-tonne basis. This includes a tax of Rs 100 for coal and iron ore, Rs 70 for bauxite, and Rs 50 for manganese ore and other minerals.
Big mines like coal and iron ore—where prices are low but volumes are high—stand to be the most affected because the taxes are on a per-metric-tonne basis, Arun Misra, executive director at Vedanta, told NDTV Profit.
Coal India
Coal India has several subsidiaries operating in Jharkhand, including Central Coalfields Ltd. and Bharat Coking Coal Ltd., which produced 41.096 million tonne and 86.054 million tonne of coal, respectively, in fiscal 2024.
These two subsidiaries, in aggregate, produced 16.4% of Coal India's total fiscal 2024 coal production.
Additionally, both of these subsidiaries had an aggregate turnover of Rs 40,942.6 crore, accounting for 28.8% of Coal India's consolidated revenue from operations in fiscal 2024.
Coal India and its subsidiaries already pay statutory levies to Jharkhand annually, including Rs 13,269 crore in fiscal 2024. This includes various royalties, goods and services taxes, GST compensation cess, cess on coal, central sales tax, and state sales tax, among others.
Tata Steel
Tata Steel, with an overall capacity of 21.6 million tonne per annum, mainly operates in two Indian states: Jharkhand and Odisha.
Tata Steel has significant iron ore reserves in Jharkhand. Noamundi and Khondbond are two noteworthy iron ore mines. The company also operates captive coal mines in Jharia and West Bokaro to fuel its steelmaking processes.
About The Bill
The "Jharkhand Mineral-Bearing Land Cess Bill 2024" was introduced by Mining Minister in-charge Mithilesh Thakur. This Bill came after the Supreme Court of India's ruling on July 25, which gave states legislative power to tax mineral rights.
The bill proposes tax rates for different minerals on a per-metric-tonne basis. This includes a tax of Rs 100 for coal and iron ore, Rs 70 for bauxite, and Rs 50 for manganese ore and other minerals.
One of the major motivations for the bill included how Jharkhand contributed 40% of the country's mineral resources but remains underdeveloped, Thakur said.
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