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Home News Power Sector News Himachal Pradesh Electricity (Taxation on Generation) Bill, 2011

Himachal Pradesh Electricity (Taxation on Generation) Bill, 2011

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DhumalResource-starved Himachal Pradesh on 08-04-2011 introduced a Bill - Himachal Pradesh Electricity (Taxation on Generation) Bill, 2011 to impose generation tax on hydro-power projects to net an income of Rs 675 crore per annum. This was the second time when the state government decided to enact a legislation - especially after Jammu & Kashmir also enacted a law to levy tax on water used in generation of hydel power.

Inquiries from the state Assembly reveal that the Congress government in 1995 had also passed a similar law seeking the Centre's nod to impose generation tax on hydel projects. The same did not get assent of the President of India .

After introducing the Bill,Chief Minister Prem Kumar Dhumal said, "We have been persistently impressing upon the Centre to allow the state to mobilise resources from this sector. I have spoken, and also written to Union Finance Minister Pranab Mukherjee in this regard and also reminded him about the Government of India's (GoI) decision allowing states under Article 282 of the Constitution of India to impose such charges. This is within our rights and the GoI should permit us (Himachal Pradesh) to tap this resource. It's not going to impose any burden on the power producers."

The Bill, which will come up for discussion in the House tomorrow - on the last day of the Budget session - proposes levying of generation tax at the rate of 25 paise per unit of the power generated in the state.

Under Section 5 of the Bill, all power generating companies will be required to maintain a proper record of power produced, amount of tax payable and amount of tax paid, if any.

Himachal Pradesh has a hydro power potential of 22,000 MW. At least three new hydro power projects, including the 1,000 MW Karcham Wangtoo private sector project of the Jaypee group, are slated to start generation this year.

The state is already getting 12 per cent free power from projects already commissioned.

Says Dhumal, "In absence of additional resources, speedy execution of various development works is expected to be adversely affected. If the Centre allows the state to impose generation tax, which is our right, the income generated could be plugged back into generation of power - which will also benefit the country".

He said the Centre had already withdrawn the industrial package three years before its scheduled period but recently Jammu and Kashmir had been given a financial package. The state has also passed a law to levy tax on water used for hydel power generation. "Why can't Himachal be also allowed to do so for mobilising additional resources," he asked.

Dhumal also introduced five other Bills in the House seeking amendments in the Criminal Law for application of Section 304 AA of Indian Penal Code against drunken driving and causing death by public service vehicles, that is, vehicles like maxicabs, motorcab and contract carriage.

Another bill, Himachal Pradesh Tourism Development and Registration (Amendment) Bill 2011, was also introduced by the Chief Minister to strictly enforce the law against hoteliers and protect rights of tourists for getting better services at reasonable tariff levels.

Source - Indian Express


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