India: Goa's iron ore miners lobby for reduction in stamp duty

Goa's miners want a reduction in the stamp duty before they begin operating the mines they have bagged in the auctions that had earlier taken place in the state.

The new lessees, including Vedanta and Fomento Resources, say they would like to pay a rationalised stamp duty, not for the entire lease period of 50 years, but for a period of ten years to begin with. Writing to Chief Minister Pramod Sawant on their behalf, the Goa Mineral Ore Exporters' Association, claimed the prevailing stamp duty, if extended, would be "astronomical" and "without bearing," since the available reserves would not last a full lease term of 50 years.

The 9 January 2024 letter says, "Further, there are no specific provisions for establishing stamp duty for auctioned blocks in Goa since the existing Goa stamp duty provisions were introduced in November 2013/December 2014 and the auction regime subsequently in January 2015. This interim measure was to ensure the State tide over the economic challenges at that time."

The Indian Stamp (Goa Amendment) Act was last amended by the late Chief Minister, Manohar Parrikar, after the courts told him to renew leases. The state charges INR 15/tonne for the annual extraction volume permitted under the Environmental Clearance, over the life of the lease, which the state's mining lobby believes is irrational.

The Goa Chamber of Commerce reiterates the same argument in its pre-Budget expectations from the government. The state has comparatively low-grade ore, nonetheless the auctioned mines fetched between 58.8% and 111.3% premiums. The GCC also hopes for special incentive packages for promoting beneficiation of low-grade iron ore (below 51%Fe) and for their adoption of 'green' mining technologies. Its wish list also includes a widening of existing roads, and mining corridors from mine to jetty, with a simultaneous upgradation of jetties and river logistic infrastructure. It suggests the government set aside 30% of the District Mineral Fund and Goa Iron Ore Permanent Fund for such projects.

The Goa government auctioned 9 leases in two tranches. The last of these auctions were held in April 2023 after which there was a lull. Thus far, only Vedanta's Bicholim Block 1 has been recommended for 3 mntpa environmental clearance by the Ministry of Environment's Expert Appraisal Committee (EAC). Under the prevailing stamp duty, it would have to pay INR 225 crore in stamp duty alone.

JSW Steel had made a similar plea to the Odisha government, for a relaxation in stamp duty for Jajang mine. Odisha had declined to consider the same and the matter is under litigation. The Centre's move to rationalise the stamp duty was also met with stiff resistance by states that had stressed that this was a state matter under the Constitution, and it was up to them to charge as they pleased. Changes if any would be undertaken under the Indian Stamp (Goa Amendment) Act and would be hugely beneficial, if not challenged, with restrospectice effect, to the lessees of the mines already auctioned.