Meghalaya Coal Sector Under Scrutiny After Arrests

Meghalaya has collected a relatively small amount of goods and services tax (GST) from coal sales — just under ₹14 crore since 2018 — while state authorities have arrested multiple mine owners in an intensifying enforcement push against unlawful mining and transportation activities, Chief Minister Conrad K. Sangma told the state assembly on Monday. The disclosure highlights ongoing challenges in formalising mineral value chains, balancing fiscal outcomes and tackling environmental and safety risks tied to coal extraction in the state’s hilly districts.

In a written response to a legislative query, the Chief Minister said Meghalaya’s cumulative GST revenue from coal transactions stood at ₹13,87,77,996 from 2018 through early 2026, a figure drawn from registered coal traders rather than mine owners themselves. Of the 574 GST-registered coal traders in the state, only three are active mine owners with official tax registration, indicating a sharp imbalance in formal compliance across the sector.Meghalaya revised its GST rate on coal from 5 per cent to 18 per cent in September 2025, but the full revenue impact remains unclear because no auctions of coal blocks were conducted in October and November of that year, and filings for December’s returns were not yet completed at the time of the assembly session. Officials caution that comparative assessments of year-on-year revenue performance will only be possible once returns are lodged and verified.

The modest revenue figures come amid stepped-up actions against illegal mining in the East Jaintia Hills, where a February mine blast at an unauthorised site killed dozens and triggered intensified policing and judicial scrutiny. Recent operations by state police and enforcement agencies have led to the seizure of over 17,000 metric tonnes of illegally mined coal and explosive materials from abandoned sites, alongside dozens of FIRs and multiple arrests linked to unlawful extraction and transportation.Fourteen mine owners have been formally arrested since 2018 in operations targeting illicit coal activities — a development underscoring the persistence of unregulated mining despite formal auction processes and mineral resource governance frameworks. State authorities have yet to provide an official tally of all illegal mining sites, but the assembly response suggested the number of unregistered operations remains material.

Urban and environmental experts say the coal sector’s regulatory challenges resonate well beyond tax tables. In Meghalaya’s steep terrain, informal coal mining — often referred to locally as “rat-hole” mining — has long raised concerns about ecosystem degradation, watercourse disruption and disaster risks. The deadly blast earlier in February highlighted the human cost of lax oversight and the need for rigorous safety frameworks tied to mining licences, environmental approvals and community protection measures.For fiscal planners, the state’s relatively low GST yield from coal suggests a gap between the resource’s economic footprint on the ground and its contribution to public revenue. While the recent GST rate uplift aims to strengthen tax receipts, sustainable revenue growth will depend on expanded formalisation of miners and traders, improved auctioning processes and digital monitoring of extraction and sales. Analysts caution that without such structural reforms, future state revenue forecasts — especially those linked to natural resource sectors — may continue to underperform relative to potential.

Looking ahead, balancing economic, environmental and social imperatives will be key as Meghalaya’s policymakers aim to integrate mineral resource governance with broader development goals. Robust enforcement, transparent auction frameworks and community engagement could help reduce illegal mining while supporting safer, more accountable resource utilisation in the hill state.

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Meghalaya Coal Sector Under Scrutiny After Arrests