Hydel projects: HP seeks nod to levy generation tax

  • 27/05/2008

  • Business Line (New Delhi)

The Himachal Pradesh Government has sought the Centre's approval for levying generation tax on hydro electricity projects in the State and extension of the industrial package till 2013. The Chief Minister, Mr Prem Kumar Dhumal, raised the issues in a letter written to the Union Finance Minister, Mr P. Chidambaram, recently, official sources said today. Mr Dhumal has pointed out that under Article 288 of the Constitution of India, the State could levy generation tax. BUDGET SPEECH He referred to the budgetary speech made by the Finance Minister indicating the intention of the Centre to permit hydropower States to levy tax on generation to make the hilly States financially sound. He urged Mr Chidambaram that the matter should be examined at appropriate level and decided in favour of small hilly States that are denied of their legitimate share in hydropower projects. INDUSTRIAL PACKAGE Mr Dhumal also urged the Centre to extend the industrial package provided to it by the former Prime Minister Atal Bihari Vajpayee to its original period of 2013, the sources said. The duration of the package on the lines of one given to the North Eastern States has been curtailed by the succeeding UPA Government to 2010. Mr Dhumal sought extension of the period to 2013 to help Himachal Pradesh, considered as one of the most debt stressed States, develop economically.