The Hindu Business Line : FIMI opposes ad-valorem royalty on minerals

New Delhi, July 7 The Federation of Indian Mineral Industries (FIMI) has opposed the introduction of ad-valorem royalty system for minerals as proposed in the draft National Mineral Policy 2007 approved by the Group of Ministers (GoM) on Friday. The FIMI is of the opinion that ad-valorem structure would create administrative difficulties and lead to litigations.

According to the Federation, an upward revision in royalty rates based on the quantity would be more realistic. “The ad-valorem royalty system can create more issues and would be difficult to monitor. The industry does not mind an upward revision of royalty rates on tonnage basis as it would be easy to monitor,” Mr Rahul N. Baldota, Vice President, FIMI, said at a press conference here on Saturday.

Extra 20%

The Federation has said that in the ad-valorem system, the royalty is presently charged on State-wise average value of minerals by grades as calculated by the Indian Bureau of Mines. However, for the purpose of computation of royalty, the State Governments add 20 per cent of this benchmark value to the royalty for the final payment.

“This practice is not reasonable and has no basis. FIMI would therefore like to request the Ministry of Mines for the deletion of the 20 per cent of the benchmark value in the royalty payable by the mineowners,” Mr R.K. Sharma, Secretary General of FIMI, said.

The Federation also pointed out that availability of iron ore was not a constrain for the steel industry to grow but factors like availability of water, power, coal and other raw materials are the areas that manufactures must look into.

Export worry

The Federation also felt that the export duty that has been levied by the Finance Ministry has not achieved the objective. “Already, because of the export tax introduced in this year’s Budget, exports are down and the situation has worsened with the strengthening of the rupee. Last year the exports were around 93 million tonnes but this year it may come down by 15-20 per cent,” Mr Baldota said.

More Stories on : Minerals | Policy | Taxation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Raja wants BSNL tender reviewed; ‘rates too high’

RCom, Qualcomm bury differences, in new tie-up

One year on, ‘Nathula Pass’es more benefits to tourism sector

Strong rupee: Textile exporters go for fabric imports from China, other neighbours

‘Mining policy should ensure that ore deposits are economically liberated’

FIMI opposes ad-valorem royalty on minerals

At 15000, Sensex stocks aren’t more expensive