Royalty is an
amount payable by a lessee to the lessor for removing or consuming a mineral. Section 9 (1) of the Mines and Minerals
(Development & Regulation) Act requires the holder of a mining lease or his agent,
manager, employee, contractor or sub-lessee to pay royalty in respect of any mineral
removed or consumed from the leased area at the rate specified in the Second Schedule of
the Act. Section 9(3) of the MMRD Act empowers
the Central Government to enhance or reduce the royalty rates in respect of any mineral by
notification in the Official Gazette with effect from such date as may be specified in the
notification. This revision is done by
amending the particular entry of the royalty rate for the respective mineral in the Second
Schedule of the Act. The proviso to Section
9(3) of the Act prevents the Central Government from enhancing the rate of royalty in
respect of any mineral more than once during any period of three years. The Act also does not mandate that royalty on coal
should be revised after every three years.
Rates
of Royalty on Coal since 1971
The coal royalty rates
fixed in 1971 ranged from Rs. 1.50 per tonne for low quality coal to Rs. 2 per tonne for
high quality coal. The royalty rates on coal
were subsequently revised in July, 1975, February, 1981, August, 1991, October, 1994 and
August, 2002. A comparative statement of coal
royalty rates fixed on 13.2.81, 1.8.91, 11.10.94 and the existing royalty rates fixed on
16.08.02 is given below:-
(Rs. per tonne)
Coal
Group |
Coal Royalty Rates w.e.f.
13.2.81 |
Coal Royalty Rates w.e.f.
1.8.91 |
Coal Royalty rates w.e.f.
11.10.94 |
Coal Royalty rates w.e.f.
16.8.2002 |
Group-I Coking Coal
SG-I,II WG-I |
7.00 |
150.00 |
195.00 |
250.00 |
Group-IICoking Coal
WG-II,IIINon-coking A,BSemi-coking Gr.-ISemi-coking Gr.-II |
6.50 |
120.00 |
135.00 |
165.00 |
Group-IIICoking Coal
WG-IV, Non-coking-C |
5.50 |
75.00 |
95.00 |
115.00 |
Group-IVNon-coking D,E |
4.50 |
45.00 |
70.00 |
85.00 |
Group-VNon-coking F,G |
2.50 |
25.00 |
50.00 |
65.00 |
Group-VICoal produced
in Andhra Pradesh |
5.00 |
70.00 |
75.00 |
90.00 |
(* the 1981 coal royalty rates are still continuing for the State of
West Bengal on the ground that the Government of West Bengal is continuing to levy cesses
on coal which have been withdrawn by other State Governments.)
Royalty rate
on lignite was revised from Rs.2.50 per tonne to Rs.50/- per tonne w.e.f. 15-3-2001.
COMMITTEE
TO CONSIDER REVISION OF RATES OF ROYALTY ON COAL – CONSTITUTION OF.
In order to
consider the question of revision of rates of royalty on coal and lignite in all its
aspects, a Committee has been constituted by the Government on 2.6.2005 with the following
composition :-
i) Addl.
Secretary, Ministry of Coal
Chairman
ii) Joint
Secretary (Coal)
Member
iii) Representative
of Ministry of Mines
Member
iv) Representative
of Ministry of Power
Member
v) CMD,
CMPDIL
Member
vi) Representative
of CIL
Member
vii) Representative of FICCI
Member
viii) Representative of FIMI
Member
ix) Director,
Ministry of Coal
Convener
The terms of reference
of the Committee will be as under :-
i)
What should be the basis of
fixation of rates of royalty on coal – whether it should be ad valorem or on tonnage
basis ?
ii)
To what extent a revision in rates of
royalty should be allowed keeping in mind the impact of the proposed rates of royalty on
the consumers of coal, revenues of coal producing State Governments and other relevant
factors?
iii)
If the preference is to fix the royalty
rates on ad valorem basis, the Committee may also recommend royalty rates on tonnage basis
as a second option.