Royalty Rates on Coal and Lignite

Section 9(3) of the Mines and Mineral (Development and Regulation) Act, 1957, provides that the Central Government may, by notification in the Official Gazette, amend the Second Schedule (which specifies rates of royalty) so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral, provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years.

As such, there is no mandatory provision in the Act to revise the rates of royalty every three year.

The rates of royalty on coal and lignite were last revised on 10 May, 2012.

As regards revision of the rates of royalty on coal, a Study Group was constituted on 21.07.2014 for the purpose of examining the issue of revision of present royalty rates on coal and lignite. The Study Group had earlier submitted its recommendation on 27.04.2016. However, pursuant to the change in scenario due to implementation of GST and other factors, the matter was again referred to the Study Group.