Vedanta urges Centre for reasonable tax regime

Bengaluru: Mining firm Vedanta Wednesday urged the government for a reasonable taxation regime, saying that iron ore mining companies shell out as high as 45 percent in taxes.

"We incur export duty tax of 10 percent, we incur Goa permit fund and SPV fund of another 10 percent, we have royalty of 15 percent, we have district mineral fund....So all put together we have a total of 45 percent," Vedanta Iron Ore Business CEO R Kishore Kumar told reporters here.

"In Karnataka, we have Forest Development Tax (FDT) of 10 percent on which hearing is going on in court as we are one of the petitioners," he added.

"Mineral sector is under such heavy burden of taxation... be progressive in taxation, that is what the request is from our side," he said.

Speaking about the cap on mining of iron ore, Kumar said it is time for the courts to understand the challenges of the industry and for the government to understand the challenges of taxation. "Give us the capacity, give us the reasonable taxation regime...," he said.

He said Indian companies are incurring 45 percent on taxes, while in Australia, Brazil and South Africa it is 7.5 percent when the price is same globally.

"...We appeal to the both the central and state governments regarding the taxation," he said.

Allowing resumption of iron ore mining in Karnataka and Goa subsequently, the Supreme Court had capped iron ore mining in both the states to 30 million tonnes and 20 million tonnes per year respectively.

Vedanta has large iron ore mines in Goa and Karnataka. In Karnataka, production recommenced on February 28, 2015, following receipt of all requisite clearances and approvals, at an annual capacity of 2.29 MTPA, company officials said.

In Goa, operations have just begun post the monsoon. "We will ramp up Goa to its capacity of 5.5 million tonnes," company officials said.

Noting that Vedanta's appeal is pending before the Supreme Court requesting it to reconsider the cap so as to increase production, they said it is necessary to cater to the demands of growing India.