A mining company produces iron ore and sells to another company. Royalty to be paid is on the basis of
Show Hint
- quantity of ore produced
- quantity of ore sold
- difference between the quantities of ore produced and sold
- net profit
The Correct Option is B
Solution and Explanation
Under the Mines and Minerals (Development and Regulation) Act, royalty is payable on the \emph{quantity of mineral removed or consumed}, which practically means the quantity sold.
Step 2: Why not “quantity produced”?
Ore may remain in stockpiles and not be dispatched. Royalty is not charged on material still in mine premises.
Step 3: Why not “profit”?
Royalty is a production-linked levy, not dependent on profit or margin.
Thus, royalty is paid based on the quantity of ore sold.
Final Answer: (B)
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