Bombay Electricity Duty Act, 1958, (Maharashtra) Preamble - Bare Act

Act Info:

THE BOMBAY ELECTRICITY DUTY ACT, 1958¹

[Act No. 40 of 1958¹]

PREAMBLE

An Act to provide for the levy of a duty on consumption of electrical energy in the State of Bombay.

WHEREAS it is expedient to provide for the levy of a duty on consumption of electrical energy in the State of Bombay;

It is hereby enacted in the Ninth Year of the Republic of India as follows :-

NOTES

Different laws pertaining to the levy of electricity duty were in force in different areas except Marathwada area in the reorganised State of Bombay. No corresponding law was in force in Marathwada area. It was, therefore, considered necessary to unify all the different laws relating to levy of electricity duty and also to extend this law to the Marathwada area. It was also felt necessary to apply uniform rates of duty throughout the State. The Act was designed to achieve these objects.--Statement of Objects of Reasons.

STATEMENT OF OBJECTS AND REASONS

For the purpose of augmenting the revenue to meet the requirements of the Third Five-Year Plan of the State, it was proposed to increase the rates of electricity duty under the Bombay Electricity Duty Act, 1958, certain deficiencies had also come to light in the working of the Act.

The Bombay Electricity Duty Act, 1958, classified, the duty payable under two broad headings, viz. :-

(i) for lights and fans, and

(ii) for any other purpose.

The latter category not only includes industrial and agricultural uses, but also included purposes such as heating, cooling, refrigeration and operation of small equipment in residential and commercial premises. All these users paid the same basic rate of 0.8 np. per unit. The duty on lights and fans. however, was much higher ranging from 3 np. per unit to 8 np. per unit. It was now proposed to do away with this anomaly reclassifying the users so that while special treatment could be given to industrial and agricultural users, other purposes would attract the same rate of duty irrespective of whether they involve lights and fans only or lights and fans together with other purposes such as heating, cooling, etc. For this purpose it was proposed to sub-divide the other users into :

(i) Residential premises, including hospitals, nursing homes and dispensaries and educational institutions maintained for private gain;

(ii) Commercial premises excluding air-conditioned theatres; and

(iii) Air-conditioned theatres.

For residential and commercial premises it was proposed to start a slab system for levying of duty on unit energy consumed for lights and fans as well as for heating, cooling etc. There were certain areas in the State where the rate of duty was either nil or less than the existing maximum rate. As the higher rates now proposed may cause hardship to consumers in those areas who consume energy upto certain limits, power was proposed to be taken under this Act to grant total or partial exemption from duty to such consumers in those areas.

For Air-conditioned theatres the rate of duty was proposed to be raised.

The electrical energy consumed for advertisements and display lighting attracted the same rate of duty as for lights and fans. It was proposed to levy a special rate on energy used for this purpose. There was a growing tendency to apply for heavy temporary loads for marriages, exhibitions, etc. As such loads could not be regarded as essential, and were not applied for frequently by any one particular party, it was proposed to charge a higher rate for this category also. In a few cases, flat rates were charged for electricity by licenses. A change was proposed to be made in the duty in respect of these flat rates.

In regard to industrial user, it was proposed to differentiate between high tension industrial consumers and low tension industrial consumers.

Concessional rates were enjoyed by electro-chemical and electro-metallurgical industrial co-operative factories, production centres and other small scale industries. The concessional rates available to small scale industries and industrial co-operative factories and production centres run by certain institutions were proposed to be withdrawn, on the ground that there was a subsidy available under the Plan Scheme for small scale industries. It was proposed to reverse the concessional rates for electrochemical and electro-metallurgical industries so as to relate them directly to the proportion which the cost of energy constitutes to the total cost of manufacture.

With a view to encouraging industrialisation in the industrially backward areas, it was proposed to grant total or partial exemption duty for new undertakings for a period of five years in certain areas. As regards agricultural use, the present rate was proposed to be kept unchanged. It was also proposed to remove certain deficiencies. The Act is designed to achieve the above objects- [Mah. Act No. 26 of 1962].

The Bombay Electricity Duty Act, 1958 was amended by the Bombay Electricity Duty (Amendment) Act, 1962 (XXVI of 1962) for the purpose of augmenting the State's revenues to meet the requirements of the Third Five Year Plan of the State. Advantage was taken of this opportunity to base the levy on a proper classification of the premises and consumers. In the course of implementation, it was found necessary to eliminate doubts and to rationalise further the rates of electricity duty payable in respect of certain premises. This Act is designed to achieve this object.--[Mah. Act No. 18 of 1963].

The Act provides for enhancing the rates of duty on consumption of electricity by certain categories of consumers as indicated by the Finance Minister in his Budget Speech of 13th June, 1972, for the purpose of augmenting Government resources for financing development programmes. [Mah. Act No. 28 of 1972].

Doubts were expressed regarding the levy of electricity duty for consumption of electrical energy in respect of premises used by industrial undertakings. Electricity duty was levied in respect of premises used by certain undertakings on the basis of job work. Accordingly they were charged at a higher rate by treating them as commercial undertakings. In order to remove doubts and to make the intentions of Government clear, it was proposed to amend the Bombay Electricity Duty Act, 1958. by taking power to fix rate of electricity duty in respect of premises used by industrial undertakings by means of notification.

As both Houses of the Legislature of the State were not then in session and immediate action was required to be taken to amend the Act, the Governor of Maharashtra had promulgated the Bombay Electricity Duty (Amendment and Validation) Ordinance, 1973, on the 19th October, 1973. The Act is intended to convert the Ordinance into an Act of the State Legislature.-[Mah. 45 of 1973].

As indicated by the Minister for Finance in his Budget Speech of 19th February. 1973 it was necessary to provide for enhancing the rate of duty on consumption of electricity in Greater Bombay for purposes of lights and fans in the premises used for business, trade, commercial or professional purposes from 15 p. per unit to 20 p. per unit and for other purposes from 15 p. to 16 p. per unit. It was also intended to bring about uniformity of the total per unit charges payable by commercial consumers in Greater Bombay with similar consumers in other parts of the State. Hence the Act.-[Mah. Act No. 16 of 1973].

The Amendment Act provides for enhancing the rates of duty on assumption of electricity throughout the State in respect of consumers as Parts A and E of the Schedule to the Bombay Electricity Duty Act, as announced by the Minister for Finance in his Budget Speech of February, 1974. In regard to consumption of electricity beyond 30 and upto 150 units a uniform rate of 8 paise per unit is to be levied and consumption beyond 150 units per month, the uniform rate of 10 per unit is to be levied. Similar revision is made on consumption in respect (i) of a hospital, or nursing home, or dispensary, or premises for educational purpose each of which when maintained for private and (ii) any other premises or for consumption of energy for any purpose not falling under any other part of the Schedule. If electricity is used for purposes of lifting water for domestic use and is separately metered at the rate of 6 paise per unit is to be levied. To curb ostentatious consumers of electricity for functions like wedding receptions, etc.. provision is made to double the rate of electricity duty prescribed in Part E of the Schedule to the principal Act.

The Amendment Act is extended to secure these objects.-[Mah. Act No. 12 of 1974J.

On taking over the undertakings of certain licensees under the Indian Electricity Act, 1910 by the Maharashtra State Electricity Board, it was noticed that consumers who were supplied energy by the said licensees had failed to pay duty under the Bombay Electricity Duty Act, 1958, on the energy consumed by them. Under the provisions of the Bombay Electricity Duty Act, 1958, prior to this amending Act, the Board could not lawfully disconnect supply of energy to these consumers for failure to pay arrears of duty in respect of energy supplied by the former licensees. By this amending Act the Board is empowered to recover the aforesaid arrears from the defaulting consumers, and on their failure to pay the arrears, the Board is authorised to disconnect the supply of energy to them.

Section 8 of the Bombay Electricity Duty Act, 1958. provides for charging penal interest not exceeding 1 2 per cent. per annum on the amount of duty in arrears. Prior to this amending Act, the market rate of interest was more than 12 per cent.. and since, the loans advanced by Government financial institutions carried interest at 19 per cent. or more, the penal interest charged by Government at a rate not exceeding 12 per cent. per annum did not have the effect of penalty. To ensure prompt payment and avoid accumulation of arrears, the rate is enhanced to 18 per cent, per year tor the first three months, and 24 per cent. per year thereafter.-[Mah. Act No. 74 of 1975].

The Act seeks to amend the Bombay Electricity Duty Act, 1958, to remove certain difficulties and doubts experienced in the administration of the Act.--[Mah. Act No. 18 of 1978].

Under the Bombay Electricity Duty Act, 1958, a duty is levied on consumption of electrical energy used for different purposes at different rates. The tariff of the Maharashtra State Electricity Board for agricultural consumers was reduced by Government with effect from the 1 st September, 1978. Also exemption had been granted from payment of the whole electricity duty payable under sub-clause (a) Part H of the Schedule to the Act. when electricity was consumed for agricultural purposes. This reduction in agricultural tariff and exemption from duty involved a loss of revenue to Government worth Rs. 12 crores per annum. To make up this loss, it was necessary to increase the rate of electricity duty by 2^1/2 paise per unit, for the industrial consumers of high tension energy, the voltage of which exceeds 450 volts under normal conditions. This increase would yield approximately the required revenue to make up the loss. To achieve this object it was necessary further to amend the Bombay Electricity Duty Act, 1958, suitably.

As both Houses of the State Legislature were not in session and it was necessary to take immediate action to amend the Act for the purpose aforesaid, the Bombay Electricity Duty (Amendment) Ordinance, 1978, was promulgated by the Governor of Maharashtra on the 20th September. 1978. The Act replaces the Ordinance by an Act of the Legislature.-[Mah. Act No. 24 of 1978].

Under the Bombay Electricity Duty Act, 1958. the electricity duty was levied on the units of energy consumed for different purposes at different rates as specified in the Schedule to the Act. The Government of India also levied excise duty on generation of power. The entire non-shareable portion of the net proceeds of such central excise duty was transferred to the respective States in proportion to the revenues realised from each State on this account.

The Government of India had decided to abolish the central excise duty on generation of power, with effect from 1st October, 1984. This abolition of central excise duty was to result in a loss of revenue to the Government of Maharashtra to the extent of Rs. 40 to 41 crores per annum. In order to compensate this loss of revenue to some extent, it was proposed to increase, with effect from the 1st October, 1984, the rates of electricity duty by 2^1/2 paise per unit in respect of certain categories of consumers except consumers of electricity for agricultural purposes. This increase would partly cover the loss of revenue due to abolition of central excise duty by the Government of India from 1st October. 1984. It was. therefore, necessary to amend immediately the Schedule to the Bombay Electricity Duty Act. 1958, suitably for the purpose aforesaid.

Opportunity was also taken to carry out certain amendments in section 3(2)(a)(vii) and section 7 of the Act, which were of a formal nature.

As both Houses of the State Legislature were then not in session and circumstances existed which rendered it necessary to take immediate action further to amend the Bombay Electricity Duty Act, 1 958 suitable for the purposes aforesaid the Governor of Maharashtra promulgated the Bombay Electricity Duty (Amendment) Ordinance, 1984 on the 24th September, 1984.

The Act seeks to replace the said Ordinance by an Act of the State Legislature.-[Mah. Act No. 33 of 1984].

Under the provisions of the Bombay Electricity Duty Act, 1958, duty is levied on the consumption of electrical energy used for different purposes at different rates. With a view to mobilising additional resources with immediate effect, Government considered it expedient to revise and rationalise the rates of duty on the consumption of electrical energy for different purposes except for agricultural purpose; and for that purpose to amend the Act suitably.

It was also proposed to offer further incentive for establishing new industries in the industrially backward areas in the State by modifying the definition of "new industrial undertaking", and to take opportunity to restructure the provisions of the Act and the entries in different Parts in the Schedule to the Act and to amend certain other provisions of the Act which were found necessary in administering the Act.

As both Houses of the State Legislature were not in session and the Governor of Maharashtra was satisfied that circumstances existed which rendered it necessary for him to take immediate action further to amend the Bombay Electricity Duty Act, 1958 suitably for the purposes aforesaid, the Bombay Electricity Duty (Amendment) Ordinance. 1985 was promulgated by the Governor of Maharashtra on the 8th November. 1985.

The Act is intended to replace the said Ordinance by an Act of the State Legislature.-[Mah. Act No. 13 of 1986].

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1. For Statement of Objects and Reasons, see Bombay Government Gazelle, 1958. Extraordinary, Part V. p. 44.