Electricity Duty - Tax and Duty on Electricity Bills in India

Electricity duty is defined as per the policy of the central government with taxes going to the state government. This differs from state to state. The tax is also different for different sectors and industries.

Electricity Duty is applicable on the usage of electricity and the amount goes to the state government. The amount is applicable as per the central government policy.

Tariff Policy Setup:

The electricity tariff policy has been laid down to ensure that electricity is available to consumers at reasonable and competitive rate and to ensure that there is financial viability of the power sector. The policy ensures transparency and promotes competition and efficiency in the operations.

Cross Subsidy:

Though the cost of supplying electricity to all the categories of consumers remain the same the tariff charged is different. Domestic consumer may be charged Rs.2.5 per unit whereas industrial consumer may be charged Rs.3.5 per unit for the consumption. Domestic consumers are cross subsidized by the industrial consumers. This happens to be one of the major tool for energy conservation.

Electricity Duty or Tax:

As a substitute to the cross-subsidy, state government uses tax and duty to give subsidy to the needy consumers. Different duty or tax is charged for different consumer categories. With the collection of this duty, government manages the finances for the subsidy that is provided to the needy consumers.

Application of Electricity Duty or Tax:

The duty is charged on consumption at the applicable rate per unit of electricity consumed. If you electricity consumption is higher, you will be getting a higher electricity duty. Certain states the duty is charged on the total charges. The only way to reduce the duty is to reduce the consumption per month. This ensures that efficient energy conservation measures are taken.

Details of electricity duty or tax is as follows as per the Tariff Orders issued by various State Power Utilities:

State	Domestic	Commercial	Agriculture	LT Industry	HT industry	Railway
Andhra Pradesh	6	6	-	6	6	-
Assam	10	10	10	10	10	-
Bihar	6%	6%	4	6%	6%	6%
Chandigarh	9	11	-	11	11	-
Delhi	5%	5%	5%	5%	5%	5%
Goa	20	70	20	70	70	-
Gujarat	Rural - 7.5% Urban – 15%	25%	-	10%	15%	-
Haryana	15	15	-	15	15	-
Himachal Pradesh	3%	8%	10%	Small – 10% Medium – 15%	17%	-
Jammu and Kashmir	14 – 22%	14 – 22%	22%	22%	22%	-
Jharkhand	20-24	24-30	2	5	5	15
Karnataka	6%	6%	-	6%	6%	6%
Kerala	10%	10%	10%	10%	10%	-
Madhya Pradesh	9-15%	9-15%	-	9%	15%	-
Maharashtra	15%	17%	-	9%	9%	-
Manipur	2 Surcharge – 10%	2 Surcharge – 10%	2 Surcharge – 10%	2 Surcharge – 10%	2 Surcharge – 10%	-
Meghalaya	5	6	6	1-3%	1-3%	-
Orissa	4%	4%	2%	4%	7%	-
Punjab	13%	13%	-	13%	13%	13%
Rajasthan	40	40	4	40	40	-
Tamil Nadu	-	5%	-	5%	5%	-
Uttarakhand	15	15	15	20	25	-
Uttar Pradesh	5	7.5	7.5	7.5	7.5	-
West Bengal	10%	10-15%	-	2.5-12.5%	15%	-

Note: 1. The above data is Paisa per KWH.

2. The data was published on March, 2014. The rates may be different for 2016.

States that do not charge any tax are:

Andaman and Nicobar Island
Arunachal Pradesh
Dadra and Nagar Haveli
Daman and Diu
Lakshadweep
Mizoram
Nagaland
Pondicherry
Sikkim
Tripura

INCOME TAX

Union Budget 2018

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