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Mumbai: Committee to amend electricity duty and tax on sale Acts

12:11 AM Jul 29, 2021 | Sanjay Jog
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To give relief to industry consumers, the state government on Wednesday formed a 14-member committee chaired by the CMD of MahaVitaran (Maharashtra State Electricity Distribution Company). The committee will suggest changes and amendments to the Maharashtra Electricity Duty Act, 2016, and the Maharashtra Tax on Sale of Electricity Act, 1963. The move is part of the ‘ease of doing business’ exercise in the state.

The government resolution to this effect was issued by energy department deputy secretary PP Badgeri. The committee comprises representatives of MahaVitaran, Tata Power, Adani Electricity, BEST, MahaUrja, CII, FICCI, Mumbai Grahak Panchayat and Captive Power Producers Association.

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The committee is tasked with a comprehensive study of measures taken by other states and various orders issued by the Maharashtra Electricity Regulatory Commission (MERC) and courts, in order to make recommendations. Meanwhile, it will also make recommendations on incorporating new proposals for the benefit of captive power plants and open access consumers.

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Under the Maharashtra Electricity Duty Act, certain duty is levied on consumption of power, while the tax is levied under the Maharashtra Tax on Sale of Electricity Act, 1963, which also empowers the government to hike rates as and when the need arises.

At present, the rate of tax on sale of electricity to industry or commercial consumers in Mumbai is 34.04 paise per unit. For sale of electricity to consumers other than industrial and commercial consumers, it is 26.04 paise per unit. On the other hand, the rate of tax on sale of electricity to industry and commercial consumers in city areas covered under MahaVitaran is 19.04 paise per unit, while in any other area across the state it is 18 paise per unit.

The electricity duty plus cess is 70 paise per unit for industry consumers charged by MahaVitaran. In Mumbai, it comes to 85-90 paise per unit.

“The proposed revision in duty and cess is not enough because the average cost of power in Maharashtra is Rs 7 per unit, while in neighbouring states it varies from Rs 4 to Rs 5.50 per unit,” said Ashok Pendse, an energy expert.

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