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Royalty from minerals has been and is a very important source of revenue for the government. The royalty on minerals is paid to the state government by the mining lease holders. From the very beginning, the rate of the royalty to be paid on minerals is decided on advalorem basis (i.e. proportionate to the quantity mined or produced).
Exercising the right of the states to increase or revise the rates of the royalty, the Punjab Government proposed to raise the taxes on non-ferrous minerals with a target of generating Rs. 460 crore from the mining lease holders. This move by the Akali-BJP alliance Government in Punjab will also save the common people of Punjab from the additional tax burden which would have been increased to overcome the deficit in the budget of the state.
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