Article 288

Exemption from State Taxation for Inter-State River Valley Water and Electricity

Official heading: “Exemption from taxation by States in respect of water or electricity in certain cases”

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Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XII, Article 288, printed pages 169–170
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Last human legal review: Not yet reviewed

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1. In One Sentence

Restricts States from taxing water or electricity generated by inter-State river valley authorities, requiring prior presidential assent for any such tax laws.

2. What It Means in Everyday Language

Large hydroelectric dams and multipurpose river valley projects (such as the Damodar Valley Corporation or Bhakra Nangal) are established by central or inter-state authorities to regulate inter-State river basins.

Article 288 prevents individual host States from imposing taxes on water storage, generation, or electricity sales from these inter-State river projects.

Clause (1) preserves existing pre-constitutional tax laws until the President otherwise provides.

Clause (2) establishes a stringent constitutional check: no new State law can impose any tax on water or electricity produced by an inter-State authority unless the Bill was reserved for the President and received Presidential assent, and any subsequent rules or rate hikes require prior presidential approval.

3. Practical Illustrative Example

Everyday Scenario:

A State hosts a massive inter-State river dam and attempts to impose a "water cess" on hydro turbines supplying power across four neighboring States.

Core takeaway: Under Article 288(2), the state tax statute is void and unenforceable unless it was specifically reserved for and granted presidential assent.

Illustrative Notice: The presidential assent requirement allows the Central Government to ensure that regional river projects are not unfairly exploited by single riparian States.

4. Important Limits, Qualifications & Exceptions

Article 288 protects multi-state river valley authorities from provincial taxation.

Inter-State river authorities: Applies to authorities established by law for regulating or developing inter-State rivers.
Presidential assent mandatory: No new state tax has effect without presidential reservation and assent.
Rate increase oversight: Subsequent changes to tax rates or rules also require prior presidential approval.

5. Operative Constitutional Text

(1) Save in so far as the President may by order otherwise provide, no law of a State in force immediately before the commencement of this Constitution shall impose, or authorise the imposition of, a tax in respect of any water or electricity stored, generated, consumed, distributed or sold by any authority established by any existing law or any law made by Parliament for regulating or developing any inter-State river or river-valley. Explanation.—The expression “law of a State in force” in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas. (2) The Legislature of a State may by law impose, or authorise the imposition of, any such tax as is mentioned in clause (1), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President, received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part XII, Article 288, printed pages 169–170 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource