Now, consumers to pay more for power

Sushil Manav

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Tribune News Service

Chandigarh, November 5

Electricity consumers will now have to shell out more money as the state government is going to increase municipal tax on bills from 5 paisa per unit to 2 per cent and also charge 18 per cent GST on that.

Sources say the municipal tax on the power bill, which was 5 paisa per unit will now come out to be 16 to 18 paisa per unit for an ordinary middle-class consumer once the distribution companies start charging new rates. The sources say the new rates are likely to be charged from the current month.

Similarly, a sale circular D-39/2017 issued by the DHBVN on October 30 said that 18 per cent GST will be charged on the municipal tax with effect from July.

“GST has been introduced with effect from July 1and the present rate of GST on services is 18 per cent. It has been decided that 18 per cent GST will be levied on collection of the municipal tax for the municipal corporations and municipal committees,” said the sale circular.

Rajiv Jain, media in charge of the state, said that for the past more than 17 years, the urban local bodies were charging 5 paisa per unit as municipal tax on the power bills which was grossly insufficient.

The municipal bodies across the state owed several crores to the distribution companies as power bills for streetlights. While the streetlights and their electricity bills had increased manifolds over the years, no efforts had been made to increase the municipal tax on the power bills in all these years, he said. The government amended the rates in the recently concluded monsoon session and now, the new rates would be levied, he said.

Notably, Jain’s wife Kavita Jain is the Minister for Urban Local Bodies in the state.

Manoj Garg, an executive engineer in the commercial wing of the UHBVN, however, said that the GST was to replace the service tax which was already being charged on the municipal tax.

He said since the GST was to be paid by the municipal bodies, it would not affect the consumers.

As far as the increased rates of municipal tax on power bills were concerned, Garg maintained that the power companies were yet to receive any such orders from the government.