Karnataka High Court on 3rd Dec’15 has passed an order directing the state govt. that FDT (Forest Development Tax) could not be levied on the mineral purchased from National Mineral Development Corporation (NMDC) and private mine leases.
And FDT would be levied at the extent of 8% and not 12% only by those who purchase minerals from state controlled entities like Mysore Minerals.
In a major relief to the units of Karnataka and other neighbouring states, Karnataka HC has also directed the state govt. to refund the amount already collected towards FDT in three months to those who are not liable to pay FDT.
Earlier, the State Government, pursuant to Notification dated August 16, 2008 had amended the provisions of Section 98(A) of the Karnataka Forest Act, 1963 for levying FDT on the sale of ores by the mining lease holders and raised the rate of FDT from 8% to 12% with effect from August 27, 2008.
“This move of Karnataka HC will bring cheer not only to the state based steel units but also to the steel units from the near by states who procure minerals via Karnataka e-auctions namely Tamil Nadu, Andhra Pradesh and Goa. It is likely that participation in e-auctions might improve as there will be significant reduction in the amount of tax to be paid by the bidders after this move of Karnataka HC”, shared a south India based market participant.
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