Electricity duty to help state earn Rs 450 cr a year

MUMBAI: To discourage big-ticket power consumers from entering into private agreements with electricity generators, the state government has planned a new ‘electricity

MUMBAI: To discourage big-ticket power consumers from entering into private agreements with electricity generators, the state government has planned a new ‘electricity duty’.

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Imposing this new duty will help the state curb migration and net more than Rs450 crore every year.

On Tuesday, t he cabinet decided to repeal the archaic 1958 Maharashtra Electricity Duty Act and bring in a new, Maharashtra Electricity Duty Act, 2016, to enable these changes.

With the new Act, the state government will be able to levy this duty on consumers who plan to purchase power from power generators instead of power distribution companies.

“For instance, an industry can enter into an agreement with a nearby power plant, which is cheaper and more convenient. This process does not need the consumer to pay the state any duty, thereby adversely impacting its coffers,” said an energy department official.

This new duty, state officials hope, will also stem the rising tide of big consumers opting for such ‘open access’.

“This will be a discouraging factor as it will push the tariffs up for such consumers,” said the official.

The government plans to introduce the new law in the upcoming Assembly session.