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.
Tamil Nadu Tax on Consumption/Sale of Electricity Act, 2003
This Act has come into force on16.6.2003 following the existing Tamil Nadu Electricity Act 1962 and the Tamil Nadu Electricity Duty Act, 1939. According to the Act, 10 paise tax per unit is charged on the self-generated consumption of electrical energy and 5% tax is charged on the net charge of electricity that is sold by the Tamil Nadu Electricity Board or any other licensee.
Tax Exemptions
The below following types of consumers are exempted from the levy of the electricity tax.
- Railway Administration
- Government Bodies
- Any Local Authority
The electricity that has been sold by the Tamil Nadu Electricity Board or by other Licensees for the use of domestic and agriculture purpose.
Calculation of Electricity Tax
The monthly billing that is made by the licensee for the charges, including tax, the tax that is payable in respect of the sale of electricity at the period between the date of coming into the force of the Act and the date of first meter reading recorded would be calculated on the total sale for the period occurring between the readings immediately preceding and immediately regarding the enforcement of the Act as tabulated below:
| S.No. | Cases | Tax Per cent |
| 1. | If the term period first aforesaid is 8 days or more but is less than 16 days | 25% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 2. | If the term period of the first aforesaid is 16 days or more but is less than 24 days | 50% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 3. | If the term period first aforesaid is 24 days or more but is less than 32 days | 75% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 4. | If the term period first aforesaid is 32 days and above | The full amount of electricity tax that would have been payable on the whole consumption for the period second aforesaid. |
The bimonthly billing is made by the licensee for his energy charges, including tax, the tax that is payable in respect of the sale of electricity during the term period between the date of coming to force of the Act and the first-meter reading date that has been recorded thereafter would be calculated on the total sale for the term period occurring between the readings immediately preceding and directly following the enforcement of the Act as tabulated below:
| S.No. | Cases | Tax Per cent |
| 1. | if the term period first aforesaid is 8 days or more but is less than 16 days | 12.5 % of the tax, that would have been payable on the total consumption for the period second aforesaid |
| 2. | if the term period first aforesaid is 16 days or more but is less than 24 days | 25% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 3. | if the term period first aforesaid is 24 days or more but is less than 32 days | 37.5% of the tax, that would have been payable on the total consumption for the period second aforesaid. |
| 4. | if the term period first aforesaid is 32 days or more but is less than 40 days | 50% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 5. | if the term period first aforesaid is 40 days or more but is less than 48 days | 62.5% of the tax, that would have been payable on the total consumption for the period second aforesaid. |
| 6. | if the term period first aforesaid is 48 days or more but is less than 56 days | 75% of the tax that would have been payable on the total consumption for the period second aforesaid. |
| 7. | if the term period first aforesaid is 56 days or more but is less than 64 days | 87.5% of the tax, that would have been payable on the total consumption for the period second aforesaid. |
| 8. | If the term period first aforesaid is 64 days and above. | The full amount of tax that has been payable on the total consumption for the period second aforesaid |
Procedure for Payment of Electricity Tax
FAQs
What is 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.
What is 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.
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