COVID-19 impact: FIMI expects Indian Prime Minister’s stimulus package will crop up relief to the highly taxed mining sector

Indian Miners apex body Federation of Indian Mineral Industries (FIMI) on 13th May'20 hailed the INR 20 lakh crore special economic packages, expressing hope that the stimulus will also be used to give relief to highly taxed and struggling mining sector.

FIMI said in a statement: "We are grateful to the Prime Minister for announcing the financial stimulus of INR 20 lakh crore to make India self-reliant and boost MSMEs.”

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."

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

In a bid to give encouragement to the mining sector and make the 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).”

The high royalty rates in the country may also be reviewed to bring it at par with the mineral-rich countries. Withdrawal of duty will facilitate in monetizing the non-moving stock and will be a major contribution of revenue in the current sagging economy.

In the same way, 15% 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 5% at par with the rate applicable to the sale of minerals. GST on royalty should be removed, as it amounts to double taxation.

FIMI also 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.”

The Miners apex body concluded by saying: “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.”