The Hindu : Karnataka / Bangalore News : Private miners have to pay Forest Development Tax

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Friday, Jul 18, 2008
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Karnataka

Karnataka - Bangalore

Private miners have to pay Forest Development Tax

Staff Reporter

The move will bring in additional revenue of Rs. 150 crore to the State

Bangalore: Private iron ore mine lessees, who until now paid no more than Rs. 27 per tonne of iron ore as royalty to the Government, while selling it at Rs. 2,000 a tonne, will now come under the ambit of the Forest Development Tax. At present, the Government collects the tax only from public sector undertakings.

The move is expected to bring in additional revenue of Rs. 150 crore to the State. “By extending the levy to private mining and quarrying operations in the forest areas, we will bring about parity between the private and public sector mining and quarrying companies,” Chief Minister B. S. Yeddyurappa said in his budget address here on Thursday. The tax has been levied under powers given to the State Government by the Karnataka Forest Act, 1963. According to this Act, forest produce includes minerals (including limestone), mineral oils and all products of quarries when found or brought from forests.

“Once the government issues this notification, it will authorise the Forest Department to collect more tax on the iron ore taken out of forest areas. Private mine lessees now get away with a huge profit margin,” sources at the Forest Department said.

Environmentalists, however, have expressed some skepticism over the tax. “Imposing tax on natural resources, especially non-renewable resources, is a short-term measure. India needs a land-use policy that defines the use of natural resources, said Sanjay Gubbi, Assistant Director, Conservation Science and Policy, Wildlife Conservation Society. “You cannot put a monetary value to the ecosystem services provided by forests,” he added. Lokayukta Santosh Hegde, who has been enquiring into the irregularities in mining, said that the tax is a small amount compared to what is earned by private companies, and it will not help in curbing the rampant illegal mining in Bellary and Chitradurga.

Sandalwood growers can expect to profit from a considerable hike in the value of the wood this year. The value of sandalwood has been increased by the State Forest Department from Rs. 8 lakh a tonne to Rs. 20 lakh a tonne, according to sources in the department. “This increment is being done to encourage people to grow and protect sandalwood on their land,” the source said.

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