In a significant decision that is likely to further affect the mining industry, the State Government on Wednesday asked all district Collectors not to allow mining operations in the mines functioning under the deemed extension provision if they fail to deposit their stamp duty by July 9.
“It is necessary to ensure collection of the stamp duty from the mining lessees who are availing the benefit of deemed extension of the lease deed to fulfil the objective of the amending Act, failing which mining operation shall be stopped. You are, therefore, requested not to allow operation of the mines unless the payment of stamp duty is made on or before 9th July,” said Principal Secretary of Steel and Mines Rajesh Verma in a letter to the Collectors.
The stamp duty would be realised as per the provisions of the Indian Stamp (Odisha Amendment) Act, 2013 and Odisha Stamp Rules, 1952 as amended in 2013.
Informing that the instructions have been issued with the concurrence of the Revenue and Disaster Management (R&DM), Department, which collects stamp duty during the lease deed, Verma asked the mining officers of all the mining circles to strictly ensure compliance of the order.
The letter also said that in case of renewals covered under this sub-section and where the lease expires after July 9, the payment of requisite stamp duty has to be made by the renewal applicant on or before the date of expiry of the lease, failing which the miners shall also not be allowed to operate the mines under the deemed extension provision.
It is to be noted that the R&DM Department had issued necessary instructions on May 25 to all the Collectors to ensure payment of stamp duty by the applicants for renewal of the mining leases who have made such applications to the Government prior to the expiry of the leases.
The Government had issued a gazette notification after bringing an amendment in the Indian Stamp (Odisha Amendment) Bill, 2013, which provides for collection of stamp duty from the mines operating under deemed extension.
With this, the Government expects to mop up additional revenue of about Rs 1,000 crore annually from the mining sector. It amended the Act and has decided to levy a 15-per cent stamp duty on mining leases in future as well as for the preceding period from the mines operating under deemed extension.
The newly-inserted Section 3 (A) of the Indian Stamp (Odisha Amendment) Act, 2013, says that on every instrument of grant or renewal of a mining lease, the stamp duty chargeable shall be equivalent to 15 per cent of the amount of average royalty that would accrue out of the highest annual extraction of minerals permitted under the approved mining plan multiplied by the period of such mining lease.
In the absence of an amendment to the prevailing statute, the Government was losing a huge amount of revenue as mine owners were being allowed to continue their operations under 'deemed renewal' for years with the former sitting over the renewal process.