India, Feb. 29 -- Allowing states to levy tax on minerals besides the royalty imposed by the Centre will affect national interest, impact the overall development of the economy and lead to inflation as minerals are important raw materials for core sectors of the economy, the Union ministry of mines has told a nine-judge bench of the Supreme Court in an affidavit filed on February 26.

The affidavit reasoned that since minerals were concentrated in a few states but critical for industrial and economic development across states, their extraction and management were to be guided by national goals to ensure sustained economic growth across the nation.

The Centre said allowing states to charge cess or tax on minerals under the pretext of a ta...