The Water (Prevention and Control of Pollution) Cess Act of 1977 levies a cess on water consumed by industries and local authorities to provide funds for water pollution prevention and control. The cess is assessed based on the quantity and purpose of water consumed, with higher rates for consumption that results in non-biodegradable or toxic pollution. Specific water consumption standards are provided for assessing the cess paid by different industrial sectors like steel, paper, fertilizer and others.

1. WATER (PCP) CESS ACT 1977
&
WATER (PCP) CESS RULES 1978
Dr. A. Thangavelu

2. THE WATER (PREVENTION AND CONTROL
OF POLLUTION) CESS ACT, 1977
 An Act constituted under the Water (PCP) Act, 1974.
To provide for the levy and collection of cess on the water consumed
persons carrying on certain industries and by local Authoritie
An economic instrument for water conservation & pollution control
Local Authority :
Municipality or a contonment Board or any other body entrusted with the duty
of supplying water under the law by which it is constituted.
Commencement: Since 7th December 1977.

3. LEVY AND COLLECTION OF CESS
(Section-3 of the Cess Act)
Objective : To augment the resources of the Central
Board and the State Boards.
Applicability : To the whole of India except the
state of Jammu and Kashmir.
Cess is levied and collected for the purpose of Water
(PCP) Act 1974 and utilization there under.

4. • WHO IS LIABLE TO PAY ?
Any industry generating hazardous wastes, irrespective
of the water consumption.
Any industry having water consumption more than 10
KLD
•
•
Every person carrying on any industry and every local authority
“Industry” includes any operation or process or treatment and
disposal system, which consumes water or give rise to sewage /
trade effluent.

5. X Y
Supplies
If Y is liable to pay cess, then Y has to pay
•
EVERY LOCAL AUTHORITY.
(Municipal corporation, Municipal councils, or any other body
entrusted with the duty of supplying water.)
In case any local authority supplies water to any industry or
another local authority, then the industry of the second local
authority is liable to pay cess and not the original water supplier.
If any local authority supplies water to any “Industry” or any
“LOCALAUTHORITY”

6. ASSESSMENT CESS
 Quantity of Water Consumed


Rate (Paise / Kiloliter)
Specific purpose of consumption

7. SCHEDULE II
Purpose for which
water is consumed
Rate of cess under sub-
section (2) of section-3
Rate of cess under sub-
section(2A) of section-3
(1) (2) (3)
1. Industrial cooling,
spraying in mine pits
or boiler feeds.
Five paise per kiloliter Ten paise per kiloliter
2. Domestic purpose Two paise per kiloliter Three paise per kiloliter
3. Processing whereby
water gets polluted
and the pollutants are
easily bio-degradable
and are non toxic.
Ten paise per kiloliter Twenty paise per
kiloliter
4. Processing whereby
water gets polluted
and the pollutants are
not easily bio-
degradable or toxic.
Fifteen paise per
kiloliter
Thirty paise per kiloliter

8. CESS IS CALCULATED ON THE BASIS OF :
i) Quantity of Water consumed
Water consumed for the purposes specified in
column-1 of the Table (Schedule-II).
Consumption of water includes supply of water.
ii) Rate (Paise / Kilometer)
Rates specified in column- 2 and column- 3 of the Table.
Column- 2 (at normal rate as per Sub section- 3(2))
Column- 3 (at maximum rate as per Sub section- 3(2A))
iii) Status of Compliance to provisions of Water Act

9. CHARGED AT NORMAL RATE IF
Installed ETP/STP for treatment of the effluent.
Complied to all provisions of Water (PCP) Act
Complied to all standards laid down under E(P) Act
CHARGED AT MAXIMUM RATE IF FOUND
Non compliance to the provision of Section- 25 of the Water
(PCP) Act, 1974.
Non compliance to the standards laid down under the
Environment (protection ) Act, 1986.

10. AFFIXING OF METERS
(Section- 4 of Cess Act)
Water meters are to be affixed for measuring and recording water consumption.
 Measuring devices may be venturi meters, orifice meters with integrators and
recorders confirming to the standards of ISI.
 In case suitable meters are not available for any purpose, V- notches, rectangular
notches with certain flow recorders may be installed after obtaining permission
from the Cess assessing authority.
 Separate meters are to be providedfor assessing water
consumption for each of the four purposes
 Meters shall be affixed at the entrance of the water supply system within
the premisesof the consumer or as approved by the
assessing authority.
 In no case, any water tapping will be there before the metering point.

11. FURNISHING OF RETURNS
(Section- 5 of Cess Act)
The consumer shall furnish Returns :
To the assessing authority.
In Form- I of Cess Rules
On or before 5th of every calender month
Details of consumption for different purposes.
In case no return is furnished, a notice shall be issued. (Form IA)

12. FORM -I
Name and
Address of
the
consumer
Purpose for
which water
consumed
Reading at
the
beginning
of the first
day of the
calendar
month
under
report
Reading at
the end of
the last day
of calendar
month
under
report
Quantity of
water
consumed
in Kilo liters
If the meter
was out of
order the
monthly
average
consumption of
water for the
previous 3
months of
working period
Quantity of
water
qualifying
for rebate
according
to the
assessee
Remarks
(*)
1 2 3 4 5 6 7 8
1. Industrial cooling
spraying in mine pits
or boilers feed
(i)
(ii)
(iii)
from Municipal water supply mains
from well/tube well
from canal
(iv)
(v)
from river
from any other source
2. Domestic purpose (i)
(ii)
(iii)
(iv)
(v)
from Municipal water supply mains
from well/tube well
from canal
from river
from any other source
3. Processing whereby
water gets polluted
and the pollutants
are easily
biodegrable
(i)
(ii)
(iii)
(iv)
(v)
from Municipal water supply mains
from well/tube well
from canal
from river
from any other source
4. Processing whereby
water gets polluted
and the pollutants
are not easily
biodegrable and are
toxic
(i)
(ii)
(iii)
(iv)
(v)
from Municipal water supply mains
from well/tube well
from canal
from river
from any other source
(*) for claiming rebate under Col…7 the assessee shall indicate in this column the analytical and other reports
annexed to this return in support of this claim.

13. ANNEXURE TO FORM - I
Sl.
No.
Polluting parameters
as mentioned in the
conditions imposed
under consent
granted under
section 25/26 of the
Water (Prevention
and Control of
Pollution) Act, 1974
Maximum
permissible
limits or
ranges
allowed as
per consent
conditions
Concentration
of range of
parameters as
per report
Dates on which
There was
break down
of failure of
the plant
On which
under
performan
ce was
noticed
1 2 3 4 5 6
Report of Analysis to treated effluent showing performance of the treatment
plant For the month of ………………………………..
Sample collected on …….…………….
Sample tested on …….………………..
By the laboratories ……………………
Signature ………………………..
Date ………..……………………..
Name ……..………………………
Address …….……………………

14. ASSESSMENT OF CESS
(Section-6 of Cess Act)
In case no return is received, cess shall be assessed after
conducting an enquiry.
The assessment order shall specify
(i) Period of assessment
(ii) The due date of payment (i.e. within 30 calender days from
the date of issue of the order)
(iii) Amount payable
(iv) Reasons for assessment at maximum rate (if so)
Copy of the assessment order shall be sent to the consumer.
AUTHORITY- MEMBER SECRETARY OF THE STATE BOARD.
Based on the Return, Cess shall be assessed.
Inquiry to be made before assessment if felt necessary.

15. REBATE
(Section-7 of Cess Act)
A rebate of 25 % on the assessed amount at normal rate allowed, if :
Installed ETP/STP for treatment of the effluent.
Complied to all provisions of Water (PCP) Act
Complied to all standards laid down under E(P) Act
No rebate shall be allowed, if :
•
•
Water consumption is in excess of the maximum quantity*.
Failure to comply with the provisions of Section- 25 of Water
(PCP) act, 1974 and standards prescribed under the E (P)
Act, 1986.

16. REMITTANCE AND REIMBURSEMENT
(Section-8 of Cess Act)
The cess levied shall be credited to the consolidated fund
of Central Govt.
 By 10th of every calender month
 In form of Bank draft to the MoEF, Govt. of India,
 MoEF shall remit the amount to the Reserve Bank of India.
• The Central Govt. shall pay the Central Board and the State
Boards out of the proceeds as Reimbursement.
 A maximum of 80 % of the cess collected by the State Boards is
paid as reimbursement.
The funds received shall be utilized under specified heads
as per Section-17 of Water (PCP) Act, 1974.

17. POWER OF ENTRY
(Section-9 of Cess act)
Any officer or authority of the state Govt. specially empowered in
this behalf by that Govt. may
• Enter any place, at any reasonable time to carry out the
purposes of this Act including testing of correctness of
the water meters.
• Do anything within that place necessary for proper
discharge of his duties under this Act.

18. OTHER POWERS
Inspect the manufacturing process of the consumer.
Inspect the water supply systems and installations in the plant.
Inspect the Waste treatment system and installations inside the
plant.
Inspect the drainage system and installations including storm
water disposal in the plant.
Call for and inspect records related to use and consumption of
materials, water and those relating to production.
Call for and inspect records relating to power consumption in the
plant.
Call for any other information or records relating to supply,
consumption and treatment of water in the plant.

19. INTEREST PAYABLE FOR DELAY IN PAYMENT OF CESS
(SECTION-10 OF CESS ACT)
INTEREST IS CHARGED IF :
Cess dues are not paid within the due date
At the rate of 2 % per month or part of a month.
From the due date of payment till the date on which cess is
actually paid

20. PENALTY FOR NON PAYMENT OF CESS
WITHIN THE SPECIFIED PERIOD
(Section-11 of Cess Act)
If not paid within the specified date, it shall be deemed to be in
arrears.
Penalty shall be imposed, after conducting enquiry as deemed
fit.
The consumer shall be given reasonable opportunity of being
heard before imposing the penalty.
The penalty amount shall not exceed the amount of cess in
arrears.
No penalty shall be charged if there is good and sufficient
reasons for such non payment.

21. APPEALS
(Section-13 of Cess Act)
•
If any consumer (assessee) is aggrieved on the assessment
order or penalty, he may appeal.
Whom to Appeal ? : - Appellate Committee. (Sub section 13(1)
Chairman of the State Board is the Chairman of the appellate
committee supported with two Board members nominated by the
chairman.
Permissible Time- Within 30 days from the date of issue of
the assessment order. (Sub section- 13(1) read with Sub Rule- 9(3))
Chairman of appellate authority may allow upto 45 days if
satisfied with the reasons of delay to be recorded in writing.
Apply in prescribed format. - Form –II, Form of
memorandum of appeal
Appeal Shall contain :
i) Prescribed Fees : Rupees fifty only
ii) Facts of the case
iii) Grounds relied upon
iv) Copy of assessment order / penalty order

22. DISPOSAL OF APPEAL
(Section-13 of Cess Act)
Upon receipt of the appeal, the appellate authority
shall dispose off the appeal after giving an
opportunity of being heard to the appellant.
Every order passed by the appellate committee
shall be final and shall not be called in question in
any court of law.

23. PENALTY
(Section-14 of Cess Act)
Any return, which is found to be false, is punishable.
* With imprisonment which may extend to six months.
* Or with fine which may extend to one thousand rupees.
* Or both.
Willfully or intentionally evading or attempting to evade the
payment of cess, is punishable.
* With imprisonment which may extend to six months.
* Or with fine which may extend to one thousand rupees.
* Or both.
No court shall take cognizance of an offence punishable under
this section- 14 of the Cess Act.

24. CESS ASSESSMENT & COLLECTION IN OSPCB
(in Rupees)
Financial
Year
Cess
Assessed
Cess Collected Remittance Reimbursement
2000-2001 1,99,18,159 1,74,55,207 1,17,00,000 87,20,000
2001-2002 1,46,32,873 1,18,53,242 1,27,00,000 1,65,00,000
2002-2003 1,69,29,417 1,03,22,546 1,20,00,000 NIL
2003-2004 3,71,72,534 2,53,17,290 1,92,45,000 38,06,490
2004-2005 4,29,89,619 3,24,44,648 3,60,88,000 2,74,96,800
2005-2006 5,71,41,760 3,95,76,405 3,96,00,000 NIL
2006-2007 5,93,71,805 5,55,63,367 5,43,00,000 1,18,40,000
2007-2008 5,00,82,396 4,81,23,030 3,65,00,000 2,61,60,000
2008-2009 4,46,24,581 4,05,22,926 NIL 4,08,00,000

25. Assessment
Collection
GRAPHICAL PRESENTATION OF CESS ASSESSMENT
& COLLECTION IN DIFFERENT YEARS
A
M
O
U
N
T
I
N
R
U
P
E
E
S
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
FINANCIAL YEAR

26. 1. Ferrous Metallurgical-
Integrated Iron & Steel- 20 Cubic metres per ton of finished steel
2. Non-ferrous Metallurgical-
(a) Copper Smelters-100 Cubic metres per ton of
copper produced.
(b) Zinc Smelters- 50 Cubic metres per ton of Zinc metal
produced
10. Chemical- Caustic Soda
i. Mercury cell process- 5 Cubic metres per ton of caustic soda
produced (excluding cooling water) and 5 cubic metres per ton
of caustic soda produced for cooling water.
ii. Membrane cell process-5 Cubic meters per ton of caustic
soda produced (including cooling water)
SPECIFIC WATER CONSUMPTION FOR VARIOUS
INDUSTRIAL SECTORS AS PER WATER CESS RULES

27. SPECIFIC WATER CONSUMPTION FOR VARIOUS
INDUSTRIAL SECTORS AS PER WATER CESS RULES
4. TEXTILE (A) MANMADE FIBRE
(i)Nylon & Polyester- 170 Cubic metres per tonne fibre
produced.
(ii)Viscose rayon- 200Cubic metres per tonne of fibre
produced
5. PAPER
(a) Small Pulp and paper
(i) Agro-residue based- 200 Cubic metres per tonne of fibre produced
(ii) Waste Paper based- 75 Cubic metres per tonne of fibre produced
(b) Large Pulp and paper
(i) Pulp and Paper- 250 Cubic metres per tonne of paper
(ii) Rayon grade Paper- 200 Cubic metres per tone of paper

28. SPECIFIC WATER CONSUMPTION FOR VARIOUS
INDUSTRIAL SECTORS AS PER WATER CESS RULES
6. Fertilizer:
(a)Straight Nitro-genous fertilizer- 15 Cubic metres
per ton of urea or equivalent produced.
(b)Straight phosphatic fertilizer- 2 Cubic metres per
ton of single super phosphate/Triple super
phosphate
(c) Complex Fertilizer- 15 Cubic metres per ton in case
the primary product is nitrogenous fertilizer and
2 cubic metres per ton in case the primary
product is a phosphatic fertilizer.

29. SPECIFIC WATER CONSUMPTION FOR VARIOUS
INDUSTRIAL SECTORS AS PER WATER CESS RULES
1. Processing of animal or vegetable products industry
including processing of milk, meat, hides and skins all
agricultural products and their waste.
(a) Tanneries-30 Cubic metres per ton of raw hide
(b) Natural rubber-6 cubic metres per ton of rubber
(c) Starch, glucose and related products-10 cubic metres per
ton of maize crushed
(d) Dairy- 4 cubic metres per kilo litre of milk
(e) Jute- 1.5 cubic metres per ton of jute produced
(f) Sugar- 2 cubic metres per ton of cane crushed
(g) Maltry- 8.5 cubic metres per ton of grain processed
(h) Brewery- 1 cubic metres per kilo litre of beer produced.
(i) Distillery- 15 cubic metres per kilo litre of alcohol produced.

30. AREAS OF UTILIZATION OF CESS FUND
Assessment of environmental quality (survey and monitoring)








Strengthening of environmental monitoring facilities and
database management (sampling, analysis, including laboratory
equipment)
Development of environmental standards (source specific and
ambient / recipient system)
Training programmes to SPCBs/PCCs
Organizing /sponsoring mass awareness programmes.
Setting up of facilities for prevention of pollution from Municipal
waste disposal sites.
Treatment and disposal and industrial sewage effluents.
Inventorization of polluting sources.
Contd….

31. Prevention of pollution from hazardous waste disposal.

 Prevention of
Zoning Atlas/
pollution by complying siting concept –
Industrial Estate Planning / Protection of
ecologically sensitive areas etc.





Reclamation / rejuvenation of water resources including
conservation strategies.
Remediation of contaminated ground water sites.
Prevention and Control of direct discharge of sewage and
trade effluent into the rivers and lakes.
Promotion of rain water harvesting and water conservation
activities.
Any other project / programme regarding prevention and
control of water pollution.