Major metals and mining stocks took a hit after the Supreme Court allowed states to levy taxes and royalties on minerals in addition to central duties. The ruling also allows states to collect past dues, dating back to April 1, 2005.
Key Impact on Stocks (As of 1:00 PM)
- Tata Steel: Down 2.38% at ₹145.34
- Hindustan Zinc: Down nearly 1% at ₹575.15
- JSW Steel: Down nearly 1% at ₹899.85
- NMDC: Down 4.15% at ₹215.15
- SAIL: Down 1.41% at ₹126.33
- MOIL: Down 2.40% at ₹413.60
Background of the Ruling
The ruling was delivered by a nine-judge Constitution Bench on August 14, allowing states to collect royalties and taxes on mineral-bearing land. The court’s decision has significant implications for mining companies, which now face potential retrospective claims.
Hindalco’s Position
In a recent interaction, Hindalco’s management stated that they do not expect any impact from retrospective claims as there are no pending claims against them. Hindalco shares were trading slightly lower at ₹620.45, down 0.15%.
Historical Context
This decision follows a long legal battle that began in 1989 when a seven-judge bench ruled that royalty was a tax. In 2004, a five-judge bench corrected this, stating that royalty is not a tax. The dispute eventually escalated to the current nine-judge bench, which has now delivered this landmark judgment.
Summary Table
| Stock | Price | Change |
|---|---|---|
| Tata Steel | ₹145.34 | -2.38% |
| Hindustan Zinc | ₹575.15 | -1% |
| JSW Steel | ₹899.85 | -1% |
| NMDC | ₹215.15 | -4.15% |
| SAIL | ₹126.33 | -1.41% |
| MOIL | ₹413.60 | -2.40% |
| Hindalco | ₹620.45 | -0.15% |
