The State Government, raising objections to the steps taken by the Union Ministry of Mines (MoM) to entertain FIMI’s objections to the amendment of Indian Stamp (Odisha Amendment) Act, 2013, has questioned the mandate of the Ministry’s Study Group in this regard.
In a letter on Thursday to the Chairman of the Study Group set up by the MoM for revision of royalty, Principal Secretary of Steel and Mines Rajesh Verma has said, “It is not within the mandate of the Study Group to examine the issue of the revision of stamp duty by the State Government.”
The objections raised by the Federation of Indian Mineral Industries (FIMI) against the recent amendment brought out by the State Government in the Indian Stamp (Odisha Amendment) Act, 2013, are being examined by the Study Group headed by the Special Secretary of the MoM.
As per the recent Odisha Amendment to the Indian Stamp Act, 1899, a lessee would have to pay 15 per cent of the annual royalty or, say, three times the royalty for one year for renewal of a lease for a period of 20 years.
Further, stamp duty is a onetime payment to be made at the time of execution of a new lease deed or to avail the benefits of deemed extension to operate the mines.
Most of the mine owners operating in the State under the deemed extension clause in Section 24 (A)(6) of Mineral Concession Rules, have evaded paying stamp duty.
Blaming it on the Centre, Verma said it continued to evade the proposals of the State raised on a number of occasions on the gamut of supernormal profits made by mining companies and requests for introduction of Mineral Resources Rent Tax (MRRT), which should accrue to the State for investment in infrastructure and for creating jobs for the impacted community.
Verma said while the iron ore prices more than doubled in 2004, the rate of royalty on the highest grade of iron ore increased from Rs 24.50 per metric tonne (MT) to a paltry Rs 27 per MT for lumps and from Rs 14.50 a MT to Rs 19 a MT for fines.
Therefore, the royalty was not increased even after completion of three years, as a result of which the increase in the market price is not reflected in the royalty, rued he.
The revision of the royalty was done only in August 2009 and, that too, at 10 per cent of the sale price published by the Indian Bureau of Mines (IBM) on ad valorem basis whereas the basis of supernormal profit existing, much higher rate of royalty on ad valorem basis should have been fixed, pointed out Verma.
This delay in revision of the royalty and the low rates of royalty have led to excess profits being made by private mining companies dealing in iron ore at the expanse of the State Government, said Verma.