Deductibility restriction on payments to State Government undertakings bars such fees as business deductions under income tax. The amendment adds a sub-clause to section 40(a) disallowing as deductions any amounts paid as royalty, licence fee, service fee, privilege fee, service charge or other fee that are levied exclusively on, or appropriated from, a State Government undertaking by the State Government. It defines 'State Government undertaking' to include State-established corporations, companies majority-held or controlled by the State or its entities, and authorities or bodies established by or owned or controlled by the State, and applies from the stated commencement to ensuing assessment years.