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Cement manufacturers operating in Tamil Nadu are set to benefit from the cessation of the Mineral Bearing Land Tax (MBLT) on limestone following the Mines and Minerals (Development and Regulation) Amendment Act, 2026. The state had imposed a levy of INR 160 per tonne of limestone from April 2025, increasing input costs for cement producers. The amendment restricts states from imposing fresh taxes or levies on mineral rights and mineral-bearing land, subject to conditions prescribed by the Centre. The move is expected to reduce operating costs and support cement makers’ margins.
The Mines and Minerals (Development and Regulation) Amendment Act, 2026 is set to provide cost relief to cement manufacturers operating in Tamil Nadu by ending the Mineral Bearing Land Tax (MBLT) levied on limestone. The Tamil Nadu government had imposed the tax at INR 160 per tonne of limestone from April 4, 2025, adding to the raw material costs of cement producers in the state.
The change follows Parliament’s passage of the MMDR Amendment Bill, 2026, which was subsequently enacted as the MMDR Amendment Act, 2026. The amended legislation establishes restrictions on states imposing taxes, cess or other levies on mineral rights and mineral-bearing lands, except subject to conditions or restrictions prescribed by the Central Government.
Limestone is a key raw material in cement manufacturing, making the removal of the levy directly relevant to producers with mining operations or sourcing requirements in Tamil Nadu. The INR 160-per-tonne charge had increased the cost of limestone for manufacturers and added pressure to their operating margins. Industry estimates cited by The Times of India indicate that the levy increased one cement maker’s limestone costs by around INR 150 crore in FY26.
The impact is expected to be particularly relevant for major cement companies with a significant presence in Tamil Nadu. Ramco Cements, India Cements, Dalmia Bharat and Chettinad are among the companies identified as potential beneficiaries of the change. Industry estimates suggest that the cessation of the levy could result in annual savings of around INR 500–600 crore for five key Tamil Nadu-focused cement manufacturers.
The change also comes as cement producers continue to contend with elevated costs across other parts of their operations. Fuel, power, freight and other logistics expenses remain important components of cement production costs. Lower limestone-related expenses could therefore provide some relief to manufacturers, although the eventual impact on profitability will depend on cement prices and movements in other input costs.
The amendment is part of the Centre’s broader effort to establish a more uniform fiscal framework for the major minerals sector. The government has said the legislation is intended to provide greater long-term stability to mineral-related activities while addressing differences in taxation across states.
The legislation does not, however, remove states’ ownership or regulatory rights over land and minerals. The Centre has stated that around 90% of total taxes and statutory payments from mining currently accrue to states and that this arrangement will continue. The amendment specifically addresses fresh state-level taxes on mineral rights and mineral-bearing lands, subject to conditions prescribed by the Centre.
For Tamil Nadu’s cement industry, the immediate significance is the removal of an additional cost on limestone, its principal raw material. The change could improve operating economics for producers and provide some support to margins. The benefit is likely to be reflected through lower raw material costs rather than through any direct government subsidy to cement manufacturers.
The amendment could also influence investment decisions in mineral-intensive industries by providing greater certainty over the fiscal treatment of mineral-bearing land. For cement companies operating in Tamil Nadu, the cessation of the limestone levy removes a cost that had been in place since 2025 and changes the economics of sourcing the mineral within the state.
Source: PIB
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