Electricity Duty | ED Exemption

What is ED or Electricity Duty-

Whenever we read an electricity bill, then there is one term usually seen in the electricity bill that is ED or electricity duty. then a question arises what is electricity duty. ED or electricity duty is a service tax charged by the state government and its rate is decided by the central government. Its rate differs from state to state. Like in Uttar Pradesh ED for domestic connection is 5% and in industrial connection, it is 7.5 %.

Calculation of ED /Electricity duty –

Since ED differs according to the category its calculation will be as follow-

  • For domestic connection-

ED= (Electricity charge+ Fix charge)*5%

  • For commercial and industrial connection-

ED= (Electricity charge+ fix charge)* 7.5%

ED Exemption OR Electricty Exemption

If there is an industry like a rice mill whose load is greater than 20 kw, then that industry shall be eligible for exemption in electricity duty. This means the consumer need not pay electricity duty to the electricity department if he will follow the procedure mentioned below. Mainly two documents are required to get the benefit –

1-    Approval from Udyog Bandhu section of the department of infrastructure and industrial development department.

2-    Approval from the State Director of the electricity safety department( Vidyut Suraksha Nideshalay)

Note-Cold storage shall not be eligible for exemption in electricity duty.

Procedure for electricity duty exemption-

Various policies have been promulgated by the Uttar Pradesh government to promote industries and under the policies, a provision has been made for exemption from electricity duty on the electricity consumed by the established industries. Under these policies, the following notification (in download button) has been issued by the Government of Uttar Pradesh, Energy Section-3, regarding the exemption from electricity duty to the industrial units to be set up in Uttar Pradesh.

The following procedure will be followed for exemption in electricity duty

1-   For the implementation of the notification issued for exemption in electricity duty, further action will be taken by the Electricity Tax Section of the Directorate of electricity safety in coordination with the Regional / Zonal Office after receiving the details related to the electricity duty received from the eligible unit at the Headquarters and maintenance of the details. It will be done on the essence.

2-    According to the notification issued under the policies, the eligibility certificate of the industrial unit is eligible for exemption in electricity duty will be obtained by the unit from the competent authority of the concerned department, in which the details of the period of exemption in electricity duty to the eligible unit will be mentioned.

3-    Required documents will be submitted by the unit to the directorate for availing exemption under notification number (276/24-P-3-2018-2000(124)/2009. dated 05.02.2018). The unit will furnish the following details related to electrical installations:

  • (a) -Photocopy of meter ceiling certificate and load acceptance.
  • (b)- No Objection Certificate in respect of electrical installations issued by the Directorate of Electrical Safety.
  • (c) -Certificate from the date of energizing the financial installation of the unit issued by the competent authority of Discom / Franchisee.

After issuing the certificate related to the exemption in electricity duty by the Regional Deputy Director of the electrical safety department, the said exemption will be given to the competent authority of the supplier / the executive engineer of the electricity department. The photocopy of the electricity bill issued by the supplier every month by the unit exempted from electricity duty will be deposited in the regional zonal office of the directorate.

Role Directorate of Electricity Safety –

As we know Electricity duty is government revenue. The amount of electricity duty payable under Section-3 of the Uttar Pradesh Electricity Duty Act, 1952 is deposited in the Government Treasury, the records related to electricity duty are inspected by the Inspectorate of the Directorate of Electricity Safety and Uttar Pradesh Electricity Under Section-3(8) of Duty Rules, 1971, adjustment and refund of the excess amount, interest and penalty, etc., related to electricity duty will be done only as per the instructions of the competent officer of Directorate of Electrical Safety. No adjustment/refund will be made by the supplier/discom without the permission of the Directorate of Electrical Safety. It is also to be informed that the audit of the records related to electricity duty is done by the audit party of the Accountant General, Allahabad.


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