Section 7. Prohibition of levy of seigniorage, etc.

(1) No State Government shall, by reason only of the fact that any works for the conservation, regulation or utilisation of water resources of an inter-State river have been constructed within the limits of the State, impose, or authorise the imposition of, any seigniorage or additional rate or fee (by whatever name called) in respect of the use of such water by any other State or the inhabitants thereof. (2) Any dispute or difference between two or more State Governments with respect to the levy of any water rate in contravention of the prohibition contained in sub-section (1) shall be deemed to be a water dispute.