The Centre has requested states to not levy or impose any tax or obligation on technology of electrical energy particularly from hydro initiatives for it being unlawful and directed them to withdraw any such levies promptly
In a communique to chief secretaries of all states and Union Territories on Tuesday, the Ministry of Energy mentioned, “It has come to the discover of Authorities of lndia (Gol) that some state governments have imposed taxes /duties on technology of electrical energy. That is unlawful and unconstitutional.”
The Ministry of Energy mentioned any such tax /obligation on technology of electrical energy, which encompasses all forms of technology viz. thermal, hydro, wind, photo voltaic, nuclear, and many others. is unlawful and unconstitutional.
The ministry additional mentioned “no taxes or duties could also be levied by any state – underneath any guise on technology of electrical energy and if any taxes or duties have been so levied, it could be promptly withdrawn.”
“Some states have imposed taxes/duties on technology of electrical energy underneath the guise of levying a cess on using water for producing electrical energy. Nevertheless, although the state could name it a water cess, it’s truly a tax on the technology of electrical energy – the tax is to be collected from the shoppers of electrical energy who could occur to be residents in different state,” the ability ministry mentioned.
“It’s because electrical energy generated inside the territory of 1 state could also be consumed in different states and no state has the ability to levy taxes/duties on residents of different states,” the communique added.
States are empowered by the structure to levy taxes on consumption or sale of electrical energy of their jurisdiction, however this doesn’t embody the ability to impose any tax or obligation on the technology of electrical energy, the communique mentioned, Nevertheless, although the state could name it a water cess, it’s truly a tax on technology of electrical energy – the tax is to be collected from the shoppers of electrical energy who could occur to be residents in different state, the communiqué added.
Entry-53 of Record-II (State Record) authorizes states to place taxes on consumption or sale of electrical energy in its jurisdiction. This doesn’t embody the ability to impose any tax or obligation on the technology of electrical energy.
Article 286 of the structure explicitly prohibits states from imposing any taxes or duties on provide of products or providers or on each the place the provision takes place exterior the state.
Articles 287 and 288 prohibit the imposition of taxes on consumption or sale of electrical energy consumed by the central authorities or offered to the central authorities for consumption by the federal government or its businesses.
Any imposition of tax on the non-consumptive use of water of those rivers for electrical energy technology is in violation of provisions of the Structure, it argued.
Hydro energy initiatives don’t eat water to supply electrical energy. Electrical energy is generated by directing the circulation of water by a turbine which generates electrical energy – on the identical precept as electrical energy from wind initiatives the place wind is utilized to show the turbine to supply electrical energy.
Due to this fact, the ministry mentioned there isn’t a rationale for levy of water cess or air cess.
Up to date: 27 Apr 2023, 02:03 AM IST