In a recent update received on levy of FDT (Forest Development Tax) on mineral purchases in Karnataka e-auctions, Karnataka DMG has mentioned the following details in the bid sheet of NMDC’s iron ore e-auction held on 29 Jan’16-
With regard to FDT, successful bidders will have to pay any difference amount arising as a result of appeal, if any, by the state government of Karnataka against the order of the Honourable High Court of Karnataka.
The same notification has been mentioned in the auctions conducted thereafter by private miners held on 01 Feb’16.
Prior to this on 3rd Dec’15 Karnataka High Court had 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.
Also, few months back buyers in Karnataka e-auction (including JSW Steel) and mine owners had filed a petition in state High Court over levy of FDT.
However Karnataka High Court is yet to notify other details regarding the refund of amount collected over years as FDT.
In talk with SteelMint, a south India based market participant shared that -“Buyers in Karnataka e-auction are requesting for refund of FDT they had paid over years on purchase of material from NMDC and private mining leases. And on the other hand, mine owners are of the view that they had reduced base prices in the e-auction to receive god response in the e-auctions. So the mine owners should be compensated for this. However state High Court is yet to notify details on this matter”.
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