Three Congress-ruled states — Karnataka, Kerala and Telangana — will challenge the Mines and Minerals (Development and Regulation) Amendment Act, 2026 in the Supreme Court after the President approved the measure on August 18. The states oppose the amendment because it prevents state governments from imposing taxes, cess or other levies on mineral rights and mineral-bearing lands, a change they say undermines state revenues and the federal balance. The move to litigate follows coordinated steps by state leaders and the party.

Congress general secretary for communications Jairam Ramesh announced that the three southern states have decided to file petitions and that legal papers have been prepared. The amendment removes a state power to levy charges based on mineral quantity, mineral value, royalty or other bases except where conditions are prescribed by the central government. It further provides that levies not deposited with or recovered by a state before the law's commencement will be regarded as invalid.

The legislation was framed to overturn a 2024 Supreme Court judgment that had affirmed state authority to tax mineral rights, and the Centre has insisted that the change is necessary to ensure uniformity in mineral taxation. The amendment also specifies that any tax, cess or levy already deposited prior to commencement will not require refund, a provision that the government says avoids retrospective liabilities.

In the bill the Union government argued that regional disparities in fiscal impositions distort markets, prompt industry to bypass local supply chains, raise transport costs and increase pollution, and could encourage higher mineral imports despite domestic reserves. The Union mines minister framed uneven state levies as causing heavy tax burdens, unpredictable charges after operations commence, multiple levies on production or dispatch, varied rates across states and retrospective impositions.

Karnataka deputy chief minister G Parameshwara raised concerns about the implications for India's federal structure and highlighted the fiscal pressures on states that already carry extensive responsibilities. The three states now intend to pursue their legal challenge in the Supreme Court as the matter proceeds through the judiciary.