Tamil Nadu Removes ₹160 Limestone Tax, Giving Cement Makers Major Cost Relief

Chennai, August 27, 2026: Cement manufacturers in Tamil Nadu are set for significant cost relief after the ₹160 per tonne Mineral Bearing Land Tax (MBLT) on limestone was discontinued following the implementation of the MMDR Amendment Bill, 2026.

The move is expected to improve the margins of major cement companies operating in the state and could ease some of the cost pressure that has affected cement prices across South India.

₹500–600 Crore Annual Savings Expected

According to an analysis by Equirus Securities, the removal of the limestone levy could result in annual savings of around ₹500–600 crore for five major Tamil Nadu-focused cement companies.

Companies such as Ramco Cements, India Cements, Dalmia and Chettinad are among the key beneficiaries, with Ramco Cements expected to gain the most.

Why the Tax Was a Concern

Tamil Nadu introduced the MBLT at ₹160 per tonne of limestone from April 4, 2025. Since limestone is a critical raw material for cement production, the additional cost put pressure on manufacturers' margins.

One cement maker estimated that the levy increased its limestone costs by around ₹150 crore in FY26 compared with the previous year.

 

MMDR Amendment Ends the Levy

The MMDR Amendment Bill, 2026, passed by both Houses of Parliament on August 13, amended the Mines and Minerals (Development and Regulation) Act, 1957.

The amendment is aimed at providing greater stability to the major minerals sector while retaining states' existing rights over land, minerals and taxes already collected.

What It Means for Cement and Construction

Cement companies could now see an improvement in their bottom lines as the additional limestone cost disappears. The benefit could also support the broader construction and real estate sector by reducing pressure on a key building material.

Grihik Takeaway: Lower input costs for cement manufacturers could eventually support more stable construction costs, which matters for homebuyers, developers and infrastructure projects. The bigger benefit, however, will depend on how much of the cost reduction is retained by manufacturers versus passed on through cement prices.