Beer may get dearer and so will water bills: Maharashtra may hike water cess | mumbai news | Hindustan Times
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Beer may get dearer and so will water bills: Maharashtra may hike water cess

Breweries, soft drink and bottled water plants will have to pay Rs200 to Rs400 cess per 10,000 litres, from earlier’s Rs45 to Rs90

mumbai Updated: Sep 15, 2017 14:31 IST
Surendra P Gangan
The hike in water cess will help cash-strapped state government earn an additional Rs300 crore from the existing collection of Rs650 crore a year.
The hike in water cess will help cash-strapped state government earn an additional Rs300 crore from the existing collection of Rs650 crore a year. (Pic for Representation)

The state government has proposed to increase water cess for water bottling plants and breweries multifold, which may lead to hike in prices of beer, soft drinks and bottled water. The government has also proposed a raise of 16%-20% cess on domestic water supplied to urban areas.

Maharashtra Water Resources Regulatory Authority (MWRRA) is in the process of giving its nod to the proposal. The new water tax rates for industries will range between Rs40 to Rs80 per 10,000 litres, which was Rs30 to Rs60. Breweries, soft drink and bottled water plants will have to pay 5-6 times more than the tax industries would. It will range between Rs 200 to Rs 400 per 10,000 liters, from earlier’s Rs45 to Rs90.

The state has exempted rural areas governed by gram panchayats as the cess rate there will remain at 40 paise per 10,000 litres. Tax on domestic water supplies to urban areas governed by municipal corporations and councils will be hiked by 20%. The existing rates are Re1 to Rs 2 per 10,000. Those using water supplied for agriculture use, will have to pay 16% more tax.

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“The last revision was done in 2011. The hike proposed is against the inflation rate of 54% during this period. While proposing the hike, we have ensured that the citizens in rural areas and farmers do not get the pinch, while at the same time the we are also trying to crack the whip on industrial sector, which has been evading the cess,” said an official from water resources department.

The hike in water cess will help cash-strapped state government earn an additional Rs300 crore from the existing collection of Rs650 crore a year. “The government wanted to take the revenue from this cess to Rs1,400 crore, but we have ensured that the machinery is in position to recover its operation and maintenance cost of the irrigation projects and supply mechanism,” said a source from MWRRA.

Officials from the water resources department said hike in prices of cold drink, bottled water and beer will be steep. Experts, too, have pointed the flaws in system determining the cess rate. “The whopping rise in the cess for the industrial sector may prove detrimental to industries. I had suggested them to levy low rates from industrial units with low turnover. The MWRRA has been claiming that higher rate may help in water conservation, but the cross subsidies given to the domestic users is defeating the purpose,” Pradeep Purandare, an irrigation expert said.

The industrial sector has however said that the rise in water cess will play adversely in growth of the industry. “The number of breweries in the state have dropped to six from 12 due to government policies. If the government is planning to increase the cess to five times of the industrial cess, from existing rate of 1.5 times, it will adversely affect our business. Forget the rise in retail prices of the product, it will be difficult even for survival,” said Rajkumar Leela, managing director of Aurangabad based Khajuraho Beer.