The Himachal Pradesh Water Commission has issued notices to 20 hydropower producing companies to deposit water cess latest by January 15.
Failing to deposit the water cess, companies will be summoned by the water cess commission, official said. The companies will be asked to explain the reason for their failures to deposit water cess, they added.
Officials aware of the matter said that 25 power projects of government undertaking have deposited about ₹27 crore, adding that the commission has collected water cess from 35 projects so far.
The Himachal government has reduced the rates of water cess charged from hydropower projects. To bring the state’s economy back on track, a decision has been taken to impose water cess on energy producers. Earlier the government had decided to collect water cess from ₹0.1 to ₹0.5 per cubic meter. It was then reduced to ₹0.06 and ₹0.3 per cubic meter.
The Central Government has repeatedly objected to the imposition of water cess, describing it as undue.
However, the state government maintained that the authority to levy water cess falls within the its jurisdiction and the Himachal government has already initiated the process through legislative means. The state government enacted the Himachal Pradesh Water Cess Hydro Power Generation Act, 2023, and set up a commission to oversee tax collection.
The state government renamed the Water Cess Commission to the Water Commission, which will be responsible for managing all water-related state and interstate issues in the future. Deputy chief minister Mukesh Agnihotri, who also oversees the jal shakti department, said that this change would streamline the management of water resources in the Himachal.
{{/usCountry}}The state government renamed the Water Cess Commission to the Water Commission, which will be responsible for managing all water-related state and interstate issues in the future. Deputy chief minister Mukesh Agnihotri, who also oversees the jal shakti department, said that this change would streamline the management of water resources in the Himachal.
{{/usCountry}}The imposition of water cess on power generation targets 172 hydropower projects in Himachal. The assessment of water usage for hydropower generation, facilitated by flow-measuring devices, is the basis for calculating the cess amount. Himachal has 23 dam projects with a total capacity of 9,203 MW power, operated by various entities, including the National Hydro Power Corporation (NHPC), National Thermal Power Corporation (NTPC), Bhakra Beas Management Board (BBMB), Satluj Jal Vidyut Nigam Limited (SJVNL), and Independent Power Producers (IPP). Additionally, six more projects with a capacity of 1,916 MW are currently under construction in the state.
“The state government has demonstrated flexibility by significantly reducing water cess charges for hydropower producers, resulting in an expected annual revenue of ₹1,842 crore, far less than the initial estimate of ₹4,000 crore. This reduction reflects the government’s willingness to cooperate with the power generation industry while protecting the state’s interests” said Agnihotri.