3. Levy and collection of cess.- (1) There shall be levied and collected a cess for the purposes of the Water (Prevention and Control of Pollution) Act, 1974 and utilisation thereunder.
(2) The cess under sub-section (1) shall be payable by-
(a) every person carrying on any *[industry]; and
(b) every local authority, and shall be calculated on the basis of the water consumed by such person or local authority, as the case may be, for any of the purposes specified in column (1) of Schedule II, at such rate, not exceeding the rate specified in the corresponding entry in column (2) thereof, as the Central Government may, by notification in the Official
(2A) Where any person carrying on any *[industry] or any local authority consuming water for domestic purpose liable to pay cess fails to comply with any of the provisions of Act, 1974 or any of the Water (Prevention and Control of Pollution) Act, 1974 or any of the standards laid down by the Central Government under the Environment (Protection) Act, 1986, cess shall be, notwithstanding anything contained in sub-section (2) of this section, calculated and payable at such rate, not exceeding the rate specified in column (3) of Schedule II, as the Central Government may, by notification in the Official Gazette, from time to time, specify.
(3) Where any local authority supplies water to any person carrying on any *[industry] or to any other local authority and such person or other local authority is liable to pay cess under sub-section (2) or sub-section (2A) in respect of the water so supplied, then, notwithstanding anything contained in those sub-sections the local authority first mentioned shall not be liable to pay such cess in respect of such water.
Explanation.-For the purposes of this section and section 4, "consumption of water" includes supply of water.
*[Substituted by Water (Prevention and Control of Pollution) Cess (Amendment) Act, 2003, section 3]
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