New Delhi: Miners on 8 July demanded the duty on iron ore exports be rolled back, saying it could result in revenue loss of Rs4,554 crore if exports slumped by 30%.
“Iron ore export duty has since been reduced to Rs50 a tonne on fines of 62% and below only. In this context, we feel export duty has achieved none of its objectives,” Federation of Indian Mineral Industries (FIMI) president D K Sahni said here.
He said there could be a revenue loss of Rs4,554 crore in case of a 30% reduction in exports and a loss of Rs2,642 crore in case exports dipped 20%.
“We also feel imposition of export duty will roll back and throttle all initiatives taken by the mining industry. In fact, ore exporters are losing between Rs200 to Rs300 a tonne owing to rupee appreciation,” FIMI secretary general R K Sharma said.
FIMI’s president-elect Rahul Baldota argued that the current system of computing the mineral royalty ad valorem is unreasonable. He sought its abolition and suggested the government instead introduce a ‘fixed price’ method to calculate royalty.
Besides the royalty, mineral-rich states have imposed an additional burden on mining industry by levying land tax and peripheral development tax, Sahni said and pointed out that the Jharkhand government has levied land tax at 5% of the commercial value whereas Orissa government has asked the miners to pay 5% of their annual profits for the peripheral development fund.
Similarly the Rajasthan government also has levied mineral-wise land tax at rates varying from Rs10 to Rs100 per sq m, Sharma said. “We feel prima facie, such taxes are not legally in line with the provisions of MMDR Act and may deserve reconsideration,” he pointed out.
Low spending on exploration, delays in clearing applications and difference in fiscal policies pursued by the Centre and states were key impediments to foreign investment in the mining sector. Baldota said the government would have to expeditiously clear applications for prospecting licences and reconnaissance permits.
“The emphasis should be to increase the mineral production rather than enhancing the rates of royalty as being advocated by the states. While computing royalty on ad valorem basis, states add 20% of benchmarked value in royalty to be paid by the miners,” Sahni said.
“This practice is not reasonable and has no basis,” he said. “FIMI would like to request the Mines Ministry for deletion of 20% of the benchmark value in the royalty payable by the mine owners,” he said.
Baldota said no mining lease should be granted without first granting prospecting licence and ensuring prospecting operations within the granted area are duly carried out.
The FIMI is of the opinion that leases which are due for renewal and have total surface area of up to 50 hectares should not attract the provision of public hearing that environmental clearance should not be insisted upon for prospecting licence as the forest degradation at this stage is nil or minimal, he added.