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Royalty not tax: SC grants states power to levy taxes on mineral rights

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July 25- The Supreme Court on Thursday, in a landmark judgment, revoked its earlier order and upheld the rights of states to impose royalty on mining and mineral-use activities. The SC judgement has affirmed that states have the authority to levy taxes on mineral rights and would not be limited by the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act). A nine-judge bench concluded that royalties and dead rent did not fulfil the characteristics of a tax, therefore did not come under the MMDR Act.The top court also said that royalty paid by minors to the Centre can’t be called a tax but is a contractual payment.