Punjab Govt Introduces New Electricity Duty for Industrial and Commercial Users
The Punjab Govt Introduces New Electricity Duty for Industrial and Commercial Users under the Punjab Finance (Amendment) Bill 2025. This new policy aims to boost provincial revenue without affecting domestic consumers. It marks a major step in changing how large-scale electricity users are taxed in the province.
Key Details of the New Duty
The new bill introduces clear rules for industrial, commercial, and institutional users:
| Category | Power Usage | Electricity Duty | Status |
|---|---|---|---|
| Industrial Users | Above 500 kVA | 4 paisa per unit | Duty applicable |
| Commercial Users | Above 500 kVA | 4 paisa per unit | Duty applicable |
| Industrial & Commercial Users | Up to 500 kVA | — | Exempt |
| Institutions with Generators | Above 500 kVA capacity | 4 paisa per unit | Duty applicable |
| Domestic Users | Any consumption | — | Fully exempt |
This means that only industrial and commercial users consuming more than 500 kVA will pay the duty.
Also Read: Punjab Traffic Fines Changes 2025
Bill Passed Without Committee Review
The Punjab Assembly passed the bill directly, without referring it to any committee.
This move fast-tracked the approval process and shows the government’s urgency in expanding the tax network for businesses and industries across Punjab.
Collection Method
The new electricity duty will be collected through two main systems:
- For National Grid Users:
- Electricity distribution companies (DISCOs) will collect the duty directly from bills.
- For Private Power Generators:
- Electric inspectors will collect the duty from private institutions producing their own electricity.
This dual collection ensures that both grid-connected and self-generating users are included.
Domestic Consumers Remain Exempt
All domestic electricity users are completely exempt from this new duty.
This protects households from extra financial pressure and ensures electricity remains affordable for residential users.
Amendment to Punjab Finance Act 1964
The bill serves as an amendment to the Punjab Finance Act 1964.
It reflects the government’s goal to modernize tax laws and improve provincial revenue systems.
Once approved by the Governor of Punjab, it will officially become law.
Purpose of the New Duty
According to officials, the main purpose is to:
- Broaden the tax base in commercial and industrial sectors.
- Ensure fair revenue contribution from large electricity consumers.
- Reduce dependency on other forms of taxation.
This move ensures that high-capacity users and generator-based institutions pay their fair share to the province.
Possible Impact on Businesses
The 4 paisa per unit duty may bring several outcomes:
- Minimal Financial Impact:
- The rate is low, but big users consuming thousands of units daily may see higher overall costs.
- Encouragement for Energy Efficiency:
- Companies might turn to energy-saving or renewable options to cut costs.
- Increased Fiscal Contribution:
- Previously untaxed private generator operators will now contribute to provincial revenue.
Official Response and Next Steps
The announcement received mixed reactions.
Some business groups raised concerns about increased costs, while government officials said the duty is small and manageable.
The bill now awaits final approval from the Governor of Punjab before implementation.
Summary Table
| Aspect | Details |
|---|---|
| Bill Name | Punjab Finance (Amendment) Bill 2025 |
| Approved By | Punjab Assembly |
| Duty Rate | 4 paisa per unit |
| Applies To | Industrial & Commercial users over 500 kVA |
| Exemptions | Domestic users & consumers up to 500 kVA |
| Collection Authority | DISCOs and Electric Inspectors |
| Awaiting Approval From | Governor of Punjab |
| Purpose | Expand tax base & regulate high-power users |
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