Uttarakhand HC upholds state’s rights to tax use of water for power generation

The Uttarakhand high court (HC) has dismissed 11 petitions filed by major hydel power projects in the state and upheld the state’s right to tax use of water for power generation. …

The Uttarakhand Water Tax on Electricity Generation Act 2012 had imposed a tax of 2-10 paise per cubic meters of water, depending on the size of the hydel project in addition to the 12 per cent power that these projects supplied to the state government free of cost as royalty. The hydropower projects had challenged the law as being unconstitutional. The bench, however, rejected all the arguments and claimed that Uttarakhand is a hill and cash-starved state with limited sources of revenue therefore the law is a way to give sustenance to the economy.

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