Centre's stand on water cess not justified: Himachal Deputy CM Mukesh Agnihotri

Shimla, October 29

Deputy Chief Minister Mukesh Agnihotri today slammed the Centre for sending a circular to the states concerned to promptly withdraw water cess/tax on the generation of electricity.

“The matter is sub judice, the Centre is a party in the case. Still, the Centre has sent out a circular to the states to remove the water cess/tax on the generation of power,” said the Deputy CM. “The Centre has already directed the CPSUs in power generation to not pay the cess and challenge it in the court. Yet, the Ministry of Power has sent a circular to the states to withdraw the cess,” said Agnihotri.

He further questioned how could the Centre term the cess imposed by the states on use of water for power generation as illegal and unconstitutional? “It’s for the court to decide whether the cess is as per the constitutional provisions or not,” said Agnihotri, adding that the Uttarakhand High Court had upheld the Uttarakhand Water Tax on Electricity Generation Act as valid. “In view of this judgment, the Centre should step back on the issue,” said Agnihotri.

Incidentally, the Uttarakhand High Court had delivered a split verdict on the matter, with one judge striking down the down the Uttarakhand Water Tax on Electricity Generation Act and the other upholding it as valid.

He further said the government had levied water cess after a detailed study of all related aspects. “The government has been flexible in its approach with regard to implementing the water cess. We are talking to the power producers, have given extension thrice to deposit the cess and have rationalised it. In view of all this, the Centre’s approach is not justified,” he said.