State List Entry 50 is a provision within the Seventh Schedule of the Constitution of India, specifically found in List II (State List). It is a legislative entry that defines the taxing power of the State Legislatures. The entry explicitly states: "Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.".
The origin of this provision can be traced back to the scheme of legislative power distribution in the Government of India Act, 1935, which the Constitution's framers retained and refined. It was created to ensure a balanced federal structure, allowing States to derive revenue from resources within their territory while granting the Union control over national mineral development policy.
The mechanism works by granting the State Legislature the power to enact laws imposing taxes on the right to extract minerals. However, this power is not absolute, as it is made conditional upon any limitations that the Union Parliament may impose through a law concerning mineral development. This entry is closely connected to Entry 54 of the Union List (List I), which empowers Parliament to regulate mines and mineral development, and the central legislation enacted under it, the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). It is also related to Entry 49 of the State List, which covers taxes on lands and buildings, including mineral-bearing lands.
A significant recent development occurred in July 2024, when a 9-judge Constitution Bench of the Supreme Court, in the case of Mineral Area Development Authority v. Steel Authority of India, upheld the States' legislative competence to levy taxes on mineral rights under Entry 50. The Court ruled that the MMDR Act, 1957, does not restrict the States' power to tax mineral rights under Entry 50 or mineral-bearing lands under Entry 49. This judgment confirmed the States' fiscal autonomy in this domain, clarifying the long-standing legal ambiguity that arose from earlier conflicting judgments like India Cement Ltd. v. State of Tamil Nadu (1990) and State of West Bengal v. Kesoram Industries Ltd. (2004).