On 13 August 2026, Parliament approved the Mines and Minerals (Development and Regulation) Amendment Bill, which bars state governments from levying any tax, cess or other charge on mineral rights or mineral‑bearing lands unless the Central Government specifically allows it. The amendment does not alter the existing revenue share that states receive from mining.
G Kishan Reddy, the Union Minister for Mines, said the changes will not take away any rights from the states or change their revenue structure. He added that the bill focuses only on the production of major minerals and is meant to increase output.
Under the new law, states cannot impose levies based on mineral quantity, value or royalty. Any such levies must be prescribed by the Central Government, according to the bill’s text.
Before the amendment, the Centre’s control mainly covered mining operations such as exploration, extraction and licensing. The land that contains minerals was not explicitly under central regulation, creating a legal split between mining activity and the land itself. This split had led to different interpretations of taxes on mineral‑bearing land by various states.
The minister said the bill is designed to boost investment and create jobs in the mining sector. He highlighted a whole‑of‑government approach that aims to increase mineral production while improving state finances.
Reddy noted that the share of revenue states receive from mining has risen to 85 percent from 65 percent in earlier years. The government’s focus is on raising production, creating employment, strengthening state finances and cutting dependence on imports of coal and other minerals.
If a state has not collected a levy before the amendment takes effect, that levy will be considered invalid. However, amounts already collected or deposited before the amendment will not be refunded.
Section 13 of the original act has been amended to give the Central Government the power to make rules that set conditions for state levies. These rules will specify when and how a state can impose a tax on mineral lands.
The bill passed the Lok Sabha on 10 August and the Rajya Sabha on 13 August, giving it full parliamentary approval.
By extending central oversight to resource‑rich areas containing lithium, cobalt, nickel, rare earth elements and graphite, the government aims to secure India’s position in the global critical‑minerals supply chain. These minerals are key for electric vehicles, batteries, semiconductors and renewable energy systems.
The amendments are part of a broader strategy to provide certainty, stability and predictability to the fiscal regime of the mineral sector. They also seek to ensure that mineral development is sustainable, equitable and uniform across the country.