State on power trip, hikes duty to 16 per cent

The Maharashtra government has played spoilsport this Diwali by increasing electricity duty for residential consumers to 16 per cent and 21 per cent and 9.30 per cent for commercial and industrial use respectively. The hike in the duty will reflect from the September’s electricity bills. The Maharashtra Electricity Regulatory Commission (MERC) had approved the hike in electricity tariff for Tata Power and Reliance Energy consumers in the city last week.

Electricity duty is similar to a tax levied on goods to create financial resources for the state kitty. It was 12 per cent on an average earlier. The energy department has issued a notification increasing the electricity duty for various types of consumers under the Electricity Duty Act. The state is expected to raise about '650-700 crore every year by imposing the duty. The Maharashtra Electricity Duty Act 2016 was on the lines of Central Electricity Act 2003 and was passed by the State Assembly this August to make the amendment in the duty.

As per the notification, residential consumers will have to pay 16 per cent duty, commercial 21 per cent, agriculture (excluding agriculture pumps) 9.30 per cent, advertisements and hoardings 21 per cent, industrial 9.3 per cent, metro rail 20 per cent and captive power 120 paise per unit.”

Industrial consumers opting for open-access power will have to pay the charges, the notification said. Earlier, consumers that opted for open access were not imposed electricity duty. With the amendment in the month of August, industrial consumers are also included in the list. “The amendment was made to save the revenue loss government was facing due to the consumers’ shift to open access. As per the Centre’s act, the consumers can go into open access power, as it is cheaper compared to state-owned companies,” an official from the energy department said.