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Electricity Tax

Provisions Contained under the Karnataka Taxation on Consumption Act, 1959 & Rules, 1959.

   I. The Provisions of the Karnataka Taxation on consumption Act, 1959 provides for Levy of Tax on consumed units of Electricity. Whereas the supplier has been authorized to collect the tax on behalf of the state Govt. for such of the units of Electricity supplied by him, the Department of Electrical Inspectorate is collecting the tax on such of energy consumed by a person from own generation or supplied by another person. It is also pertinent to add that the tax so collected by the supplier on behalf of the Dept. of Electrical Inspectorate is remitted to the Dept. of Electrical Inspectorate. The tax so collected by the Dept. of Electrical Inspectorate is remitted to the state Treasury as tax component.

Rate of Tax:

  1. The tax on units consumed from grid is leviable at the rate of 5% advolorem.

  2. The tax on units self consumed from own generation has been exempted by the state Govt. except when the same was levied at the rate of 25 paise per unit for the period from 16.10.2003 to 01.07.2004.

   II. Important provision under Karnataka Taxation on consumption Act and Rules, 1959.

  1. Section 3: The said section empowers the state Govt. for Levy of tax at rates specified by the state Govt. from time to time.

  2. Section 4: The said section empowers the state Govt. for collection of tax at rates specified by the Govt. under section 3.
  3. Section 8: The said section empowers the state Govt. for either reduction or exemption of Tax.

  4. Rule 5: The said section requires every person generating & consuming energy to file the returns of the same in Form “B” & “D”.

   III. Who is required to Remit Electricity Tax?

  1. Every Consumer of Electricity Consuming energy from the grid mains of the supplier

  2. Every consumer of electricity consuming energy generated by himself as & when the same is levied by the Govt.

  3. Every person consuming energy supplied by another person either free of cost or at a cost.

   IV. Provisions Under the Act for delayed payment of tax:
 

  1. The delay in remittance of tax attracts an interest at the rate of not exceeding 24% on the principal amount.

  2. The tax amount can be realized under the land revenue Act.

   V. Who is required to file the returns of tax?
 

  1. Every person generating and consuming electrical energy from his own generating sets filing the generation details in Form “B”

  2. Every person generating energy and supplying the same to another person free of charge in Form “D”

  3. Every person generating energy and licensed to supply the same at a cost.

   VI. Penalties for Violating Under the Act & Rules
 

  1. Whoever violates the provisions of the Act or Rules or fails to file returns is liable to be penalized on conviction.
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