What is electricity duty?
Electricity duty is a state tax on electricity use; the discom collects it on the bill and pays it to the state. Also called ED, duty on electricity, electricity tax, tax on consumption of electricity.
- Plain English
- Official sources
- Bill terms A–Z
Electricity duty on your bill
Each state sets electricity duty by its own law. The discom collects it for the state government.
Some states charge a percentage of the charges. Others charge paise per unit.
Example (Maharashtra homes): 16% of fixed Rs 130 + energy Rs 2,016 + wheeling Rs 400 + FAC Rs 100 = Rs 423.36.
Tamil Nadu's law allows 5% to 10% of the net charge for licensee sales.
Duty is not GST. If the duty line looks wrong, check your state's current notification.
Related terms
Official sources
- Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 (Bill text with Statement of Objects and Reasons, Government of Tamil Nadu), s.3(1)(a)
“the rate shall be not less than 5% and not more than 10% of the net charge” - Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 (Bill text with Statement of Objects and Reasons, Government of Tamil Nadu), Statement of Objects and Reasons
“the actual rate of tax on sale of electricity will continue to be at 5% as at present”
Read on 17 October 2026. Your State regulator’s rules and your discom’s bill have the final word.