Miners' body hopes Rs 20-lakh cr stimulus package will be used for giving relief to 'highly taxed' mining sector

Miners' body FIMI on Wednesday hailed the Rs 20 lakh crore special economic package, expressing hope that the stimulus will also be used to give relief to 'highly taxed and struggling' mining sector

Press Trust of India May 13, 2020 15:57:12 IST
Miners' body hopes Rs 20-lakh cr stimulus package will be used for giving relief to 'highly taxed' mining sector

New Delhi: Miners' body FIMI on Wednesday hailed the Rs 20 lakh crore special economic package, expressing hope that the stimulus will also be used to give relief to "highly taxed and struggling" mining sector.

"We are grateful to the Prime Minister for announcing the financial stimulus of Rs 20 lakh crore to make India self-reliant and boost MSMEs...," apex mineral body Federation of Indian Mineral Industries (FIMI) said in a statement.

The industry body added that it hoped the package "will also be used to boost the highly taxed and struggling mining sector, which is critical for raw material supply to Indian manufacturing units, power, infrastructure sectors, etc."

A majority of the mineral blocks in the country are small in size, with 72 percent of mines being less than 50 hectares in size and fall under the micro, small and medium enterprises (MSMEs) segment, FIMI said.

Miners body hopes Rs 20lakh cr stimulus package will be used for giving relief to highly taxed mining sector

Representational image. Reuters.

In a bid to give a boost to the mining sector and make country self-reliant in critical mineral resources, FIMI said that it expects the government to waive till March 31 next year the statutory mineral payments towards royalty, District Mineral Foundation (DMF) and payments towards National Mineral Exploration Trust (NMET).

This, it said, will lessen the financial burden on the mining sector.

High royalty rates in the country may also be reviewed to bring it at par with the mineral-rich countries.

"Export duty of 30 percent on iron ore having over 58 percent 'Fe' content needs to be done away with, as it is doesn’t have adequate domestic customers and has led to 162 million tonnes or iron ore lying idle at mine-heads across the country," it said.

Withdrawal of duty will facilitate in monetising the non-moving stock and will be a major contribution of revenue in the current sagging economy.

Similarly, 15 percent export duty in case of non-metallurgical grade bauxite should also be removed which will boost the small and medium mines in this segment.

The Goods and Services Tax (GST) rate on input materials for mining should be reduced to five percent at par with the rate applicable on sale of minerals.

GST on royalty should be removed, as it amounts to double taxation," it said.

"Payment towards DMF and CSR may be merged such that miners have to pay only towards DMF or CSR, as both are meant for the same purpose of local area development," it said.

As coal is a basic commodity for ensuring power supply to domestic as well as industrial consumers at competitive price, the high GST compensation cess on coal at the rate of Rs 400/tonne needs to be waived, it said.

Mines in the MSME segment are labour-intensive and do not have the wherewithal for testing COVID-19 . Hence, the district administration may support small mines with testing for coronavirus free of cost and facilitate necessary activities to tackle its spread, FIMI said.

Updated Date:

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