Guidelines:
The
Guidelines for calculation of royalty in typical cases are as
follows, namely:-
Case 1:
All non atomic and non fuel minerals and minerals other
than aluminium, primary gold, silver, copper, lead, zinc, nickel
and tin –
The
Indian Bureau of Mines publishes ‘Monthly Statistics of Mineral
Production’ which contains state-wise total value of each
mineral produced during a month in a State. The State-wise average
value for different individual minerals as published by Indian
Bureau of mines in the ‘Monthly Statistics of Mineral
Production’ shall be the bench mark for computation of royalty
by the concerned State Government in respect of any mineral
produced any time during a month in any mine in that State. For
the purpose of computation of royalty the State Government shall
add twenty per cent to this bench mark value. This value shall be
reckoned to be the sale price for the purpose of computation of
royalty. Also the value of the minerals published in the latest
published issue of the ‘Monthly Production’ will be deemed to
be applicable for the mineral mined in the previous month,
irrespective of when the royalty actually accrues. If for a
particular mineral, the information for a State is not published
in a particular issue, the last information available for that
mineral in the State in a previous issue shall be referred,
failing which the latest published information for the mineral for
all India shall be referred.
Case
2. For Atomic minerals, prescribed under Atomic Energy Act,
1962(33 of 1962):
The
minerals under this category include ilmenite, leucoxene, rutile
and zircon obtained mainly from the beach sand deposits in the
coastal states. The basis of collection of royalty shall be the
actual mineral content in the beach sand mined.
(a)
In case of sale in the domestic market, the per tonne sale
price of the separated mineral actually realized, less the cost of
transportation from the lease boundary to point of sale as shown
by the mine owners in their sale vouchers or bills or invoices
shall be considered for computing ad valorem royalty. To avoid
payment of taxes on royalty the mine owners in their own interest
record the price and royalty separately in the sale vouchers or
bills or invoices instead of indicating a composite price
inclusive of royalty. In case the price, royalty and
transportation cost are not shown separately it shall be assumed
that the price indicated in the sale vouchers or bills or invoices
is exclusive of royalty and transportation cost, and royalty shall
be charged accordingly.
(b)
In case of direct export by mine owners the sale value for
the purpose of royalty shall ordinarily be the free on board (FOB)
price realized less transportation charges from the lease boundary
to the port, loading and unloading charges at the port, port
charges (including sampling and analysis and demurrage charges, if
any), insurance charges, royalty, taxes and interest charges on
loan for export. However, in case of cost insurance and freight
(CIF) sales, sea freight insurance and cost of unloading at the
destination port shall also be deducted from such price. For such
purposes the mine owner may prepare invoices or bills indicating
the free on board price or cost insurance freight price as the
case may be each of the other charges separately.
Explanation
– For the purposes of calculation of royalty in case of minerals
Produced
in captive mines (other than aluminium, copper, lead zinc, tin,
nickel, gold and silver) and those not actually sold, Case 1. and
2. shall be applicable.
Case 3 :
For aluminium, primary gold, silver, copper, lead, zinc, nickel
and tin -
The
total contained metal in the ore produced during the period for
which the royalty is computed and reported in the statutory
returns under Mineral Conservation and Development Rules, 1988 or
recorded in the books of the mine owners shall be considered for
the purposes of computing the royalty in the first place and then
the royalty shall be computed as the percentage of the average
metal prices in the London Metal Exchange (hereinafter referred to
as the LME) for copper, lead, zinc, nickel, silver and tin and
London bullion Market Association price (commonly known as London
price) for gold during the period of computation of royalty. The
foreign exchange rate for conversion of rupee shall be the selling
rate on the date of the period of computation as published in
newspaper namely, The Economic Times. For the LME prices as well
as for London price of the commodity, either of the following
three sources shall be referred to, namely:-
(i)
Non-ferrous Report : Minerals and Metals Review,
28/30,
Anantwadi,
P.O.Box.2749,
Mumbai-400002
(ii)
Metal Bulletin
16, Lower
Marsh,
London,
SE-17 RJ
(iii)
World Metal Statistics; (Monthly or Quarterly Summary),
By World
Bureau of Metal Statistics,
27a High
Street, Ware,
Herts SG12
9BA,
United
Kingdom
Case 4: For
by-product gold and silver –
The guidelines for computation of ad valorem royalty shall
be linked to the total quantity of metal produced and the LME
price for silver and London Bullion Market Association price
(commonly known as London price) for gold as in the case 3 above.
However, in this case, the actual final production of the metal
shall be considered instead of the metal content in the ore
produced for the purposes of computing royalty.
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