New Delhi [India], November 7 : Raising the issue of imposition of water cess on electricity by some states despite it being declared illegal by the Union government, Punjab Power Minister Harbhajan Singh ETO has said that states like Punjab are being forced to purchase electricity at higher rates due to imposition of this "irrational" cess.
Speaking on the concluding day of two days Conference of Power and New and Renewable Energy Ministers at Pragati Maidan, New Delhi on Tuesday, the Punjab minister said that though the Union Power Ministry had conveyed to the states several times that the imposition of water cess was illegal but some states like Himachal Pradesh, Uttarakhand, Sikkim, and union territory Jammu and Kashmir were levying this water cess, leaving the his state Punjab with no other option but to pay higher rates on purchase of electricity from such states.
The Ministry of Power has declared water and air cess on electricity generation as unconstitutional and illegal. The ministry stated that any tax or duty on generation of electricity is illegal and unconstitutional, including all types of generation such as thermal, hydro, wind, solar, and nuclear.
The union government has termed the levying of water cess as illegal. In a circular issued on October 25, the government stated that no taxes or duties can be levied by any state on generation or inter-State supply of electricity. The government urged states to remove any taxes or duties imposed on electricity generation.
As per an Information and Public Relations Department Punjab release, the minister sought strict action from the Union government against such illegal practices of these states so that the purchasing states would get relief from overpriced power rates.
Supporting this issue raised by the Punjab Cabinet Minister, the Union Minister for Power and Renewable Energy RK Singh, as per the Punjab government release, said that the ministry has already made it very clear that this imposition is totally unconstitutional and will make sure to stop this practice.
He further said that the Union Power Ministry will also support the purchasing states in the course of law against this imposition of water cess.
Punjab Power Minister Harbhajan Singh ETO thanked the Union Power Minister for giving his support on this issue. He also suggested to construct small balancing reservoirs downstream of major dams in India to provide water for irrigation as well as generating power in full capacity.
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