The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 (Bill No. 154 of 2026), introduced in the Lok Sabha by Union Minister of Coal and Mines G. Kishan Reddy seeks to materially restructure the fiscal regime governing India’s mining sector by tightening the Union’s control over mineral-bearing lands and curbing the levying power of State Governments. On one hand, new Section 9D bars States from imposing any tax, cess or levy on mineral rights or mineral bearing lands except as prescribed by the Centre, Whereas, on the other hand, pre-commencement uncollected levies deemed “invalid at all material times”, while those already recovered are shielded from refund.
The Bill amends Section 2 of the principal Act to extend the Union’s regulatory control beyond “regulation of mines and development of minerals” to expressly include “mineral bearing lands”. A corresponding amendment to Section 3 introduces a new definition of “mineral bearing land” to mean any land having mineral contents in accordance with the parameters prescribed by the Central Government under clause (a) of sub-section (2) of Section 5. This definitional expansion is the foundational plank on which the subsequent restrictive levy regime rests.
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The operative provision is the newly inserted Section 9D, which bars State Governments from imposing any tax, cess or other levy (by whatever name called) on mineral rights or mineral bearing lands, whether computed on mineral quantity, mineral value, royalty payable or otherwise, except in accordance with such conditions or restrictions as may be prescribed by the Central Government. The provision is drafted in overriding terms, expressly prevailing over any other law for the time being in force.
Most consequentially, the second limb of Section 9D inserts a retrospective validation clause: notwithstanding any judgment, decree or order of any court, any tax, cess or levy imposed by a State Government on mineral rights or mineral bearing lands which has not been deposited with or recovered by the State Government before the commencement of the 2026 Amendment Act shall be “deemed to be invalid at all material times”. A proviso, however, protects the State exchequer by providing that any such levy already deposited or recovered prior to commencement shall not be liable to be refunded.
The Bill simultaneously amends Section 13(2) to empower the Central Government to frame rules prescribing the conditions or restrictions subject to which States may impose any tax, cess or other levy on mineral rights or mineral bearing lands. The accompanying Statement of Objects and Reasons records that the amendment is driven by concerns over heavy and uneven tax burdens, unpredictable introduction of levies even after commencement of mining operations, multiplicity of taxes on production or dispatch, non-uniformity of rates across States, and retrospective imposition of taxes, all of which, the government contends, render mining operations commercially unviable, discourage extraction, and disproportionately hurt small and medium-scale operators.
The Financial Memorandum clarifies that the proposed legislation would not involve any expenditure, either recurring or non-recurring, from the Consolidated Fund of India.
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