Policy, Notification & Order issued by Energy Department, Odisha on Electricity Duty

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Exemption of Electricity Duty

Current exemption policies

[List the policies/orders currently in force that grant ED exemption — e.g. captive power plants, renewable energy generators, specific industrial categories — with a short line on what each covers.]

How to apply

[Explain the application process for claiming exemption — where to apply, what documents are needed, and typical processing time.]

Electricity Duty in Odisha

Chronology of Electricity Duty in Odisha

Based on: (1) the Energy Department's letter/notification on auxiliary consumption dated 6.11.1999, (2) captive ED rate amendment records, 1986–2017, (3) the Odisha Electricity (Duty) Amendment Act, 2016 (Act 11 of 2016), (4) the Odisha Electricity (Duty) Amendment Rules, 2017, and (5) Notifications No. 5728 dated 26.5.2026 and No. 7819 dated 7.7.2026 on electrical safety inspection deregulation.

1. 1961 – 1986
   Legislative Foundation

   The Orissa Electricity (Duty) Act, 1961 (Act 14 of 1961) is the parent legislation under which duty is levied on energy consumed by consumers, payable to the State Government.

   The Orissa Electricity (Duty) Amendment Act, 1986 (Act 9 of 1986) — notified 13.3.1986, effective retrospectively from 17.1.1986 — made several foundational changes:

   • Redefined "unit" as 1 kilowatt hour of energy.
   • Substituted Section 3 to expand duty coverage to energy generated/supplied free of charge, energy consumed by a licensee/Board on its own premises, and energy consumed by any person generating for own use.
   • Added a Schedule prescribing category-wise rates (in paise/unit): Domestic, Commercial (6), Irrigation (18), Street lighting (3), General purpose (10), Large/Power Intensive/Heavy Industries (18–24), Public Institutions (25), Licensee/Board own premises (6), Self-generators (12), among others.
   • Exempted plants below 10 KVA capacity from duty.
2. 25.4.1992
   Rate Notification

   Notification No. 7721/E dated 25.4.1992 fixed fresh rates effective 1.4.1992, including a key entry for energy supplied to power plants/industries having captive power plants without a Board supply agreement, at 25 paise/unit, and for any person not being a licensee/Board generating for own use, at 12 paise/unit.

3. 6.11.1999 → 6.3.2001
   Auxiliary Consumption Clarification

   Following the Supreme Court judgment in State of Mysore vs. West Coast Paper Mills Ltd, the Energy Department's letter dated 6.11.1999 (Letter No. 14246) clarified the duty treatment for ICCL/IMFA and other captive power plants:

   • Auxiliary consumption was to be treated as "consumption" for duty purposes.
   • Transmission/transformation loss was not to be treated as consumption for duty.
   • Duty was to be computed retrospectively from the date of captive generation.

   A subsequent letter dated 6.3.2001 (Letter No. 3724) partially modified this, revising duty on auxiliary consumption to apply prospectively from 6.11.1999 rather than retrospectively, applicable to NALCO, ICCL, INDAL and other generating stations.

4. 10.10.2001
   Rate Amendment

   Notification No. 18237 amended the 1992 notification, raising the rate for self-generators from 12 paise to 20 paise per unit.

5. 1.1.2006
   Rate Overhaul — Percentage Model Introduced

   Notification No. 1-RE(ED)-26/2005, superseding the 1992 notification, shifted most categories from flat per-unit rates to a percentage-of-energy-charge model, with a cap of 25 paise/unit:

   Category	Rate
   Irrigation / Agriculture	2% of energy charge
   Small Scale Industry (LT)	4%
   LT Non-Industrial	4%
   LT Industrial (excl. SSI)	6%
   HT Category	7%
   EHT Category	8%
   Self-generator (not licensee/Board)	20 paise/unit
   Licensee/Board own premises	6 paise/unit
   Public water works / Railway traction	Nil

6. 2010
   Statutory Cap Raised

   The Orissa Electricity (Duty) Amendment Act, 2010 (Act 10 of 2010) amended Section 3(1), raising the statutory duty cap from twenty-five to forty paise per unit.

7. 1.10.2015
   Rate Revision

   Notification No. 8309 (issued as Odisha, post-renaming) superseded the 2006 notification and applied the new 40 paise cap: Irrigation 2%, LT Non-Industrial 4%, SSI 5%, LT Industrial 8%, HT 8%, EHT 9%. Self-generators and licensee/Board own-premises consumption rose to 30 paise/unit. A new provision brought Open Access / Special Agreement consumers under duty as if supplied by the licensee.

8. 3.11.2016
   (assented; gazetted 5.11.2016)
   Legislative Overhaul — Amendment Act, 2016 (Act 11 of 2016)

   The Odisha Electricity (Duty) Amendment Act, 2016 substantially rewrote the parent 1961 Act. This is the single most consequential amendment in the chronology — it is the statutory basis that later permitted the captive/self-generation rate to jump to 55 paise/unit (see 12.5.2017 below).

   Definitional changes (Section 2)

   • "Auxiliary consumption" redefined as energy consumed by a generating station's auxiliary equipment (plant, machinery and switch yard) plus transformer losses within the station — excluding energy for the housing colony/other facilities and for construction work.
   • "Consumer" redefined to expressly include a person who generates energy for own use, "including auxiliary consumption" — writing the 1999/2001 administrative clarification directly into the statute.
   • New defined term "energy charges" inserted — the OERC-approved tariff charges on which percentage-based duty is calculated.
   • "Licensee" redefined by cross-reference to the Electricity Act, 2003; residual references to the Indian Electricity Act, 1910 replaced throughout.

   Charging mechanism overhauled (Section 3 substituted)

   The flat category-wise paise/unit schedule structure is replaced with a two-track ceiling:

   • (a) Ordinary consumers, free-of-cost supply, and open-access/special-agreement consumers: duty at a percentage not exceeding 15% of energy charges, as notified from time to time.
   • (b) Energy consumed by a licensee on its own premises, and by any non-licensee generating for own use (captive/self-generation): duty at a rate not exceeding ₹2 (200 paise) per unit — a five-fold jump in the statutory ceiling from the 40-paise cap fixed by the 2010 Amendment Act.
   • The capacity exemption threshold for small generating plants raised from 10 KVA (1986 Act) to 50 KVA.
   • Where a meter is defective/absent or a plant fails to file returns, the Inspecting Authority may make a best-judgment assessment after a hearing.
   • Every rate notification must be laid before the Legislative Assembly for 14 days.

   Other structural changes

   • Section 5 amended — part-payments by a consumer apportioned proportionately toward duty and interest; recovered amounts adjusted first to interest, then arrears, then current duty.
   • New Section 5-A inserted — joint and several liability on transfer of business/property; reconnection barred until arrears are cleared; liquidators, receivers and directors made personally liable in specified circumstances.
   • Section 6 amended — books of account must separately record energy charges billed, category-wise.
   • Section 7 amended — Inspecting Officers are now Chief Electrical Inspector/Electrical Inspector appointed under Section 162 of the Electricity Act, 2003, of at least Chief Engineer/Executive Engineer rank respectively.
   • Section 8 re-headed "Dispute resolution" — new appellate hierarchy (Deputy → Electrical Inspector → Chief Electrical Inspector → Principal Chief Electrical Inspector); appeals require a 50% pre-deposit; exemption disputes go to the Secretary, Energy Department, whose decision is final.
   • New Section 10-A inserted — garnishee-style "special mode of recovery" against third parties holding money due to a defaulter.
   • Section 11 amended — evasion now attracts a fine of up to ₹1,000/day of delay from detection, capped at ₹1,00,000, after a hearing.
9. 24.1.2017
   (deemed effective 5.11.2016)
   Procedural Rules Amendment — Odisha Electricity (Duty) Amendment Rules, 2017

   Notification No. 617–BT(ED)-01/2016/En., dated 24.1.2017, amended the Odisha Electricity (Duty) Rules, 1961 — deemed to have come into force from 5.11.2016, the same commencement date as the 2016 Amendment Act, so that rules and parent Act took effect together:

   • Rule 2(c) substituted — "Electrical Inspector" now means the Inspector appointed under Section 162 of the Electricity Act, 2003.
   • Rule 2A substituted — minimum qualifications for an Inspecting Officer: a degree in Electrical Engineering (or equivalent) plus at least three years' practice.
   • Rule 3 substituted — licensees must show duty as a separate bill line item and remit within 30 days to a distinct Treasury head; self-generators self-assess duty on units used, including auxiliary consumption, and remit within 30 days of the month of generation; refunds run through Forms A, B and C.
   • Rule 3-A substituted — unpaid duty/interest after 30 days of a demand notice triggers a Form D notice under the new Section 10-A recovery mechanism.
   • Rule 4 substituted — a transitional, proportionate method for calculating duty where a meter-reading period straddles the 2016 Amendment Act's commencement date.
   • Rules 6–11 substituted — expanded record-keeping, monthly/annual return formats (Forms E–J), inspection and power-of-entry provisions extended to self-generators and open-access consumers, best-judgment assessment on Form K, appeal on Form L, and separate metering for combined installations.
   • Rules 12 & 13 merged into a single new Rule 12 ("Removal of difficulties") — interpretive doubts go to the Energy Department, whose decision is final.
   • Forms A–L substituted wholesale to align with the above.
10. 27.12.2016
    (effective 5.11.2016)
    Rate Revision — New Schedule Under the 2016 Act

    Notification No. 9539–BT(ED)-01-2016/En, dated 27.12.2016, superseding Notification No. 8309 dated 1.10.2015, fixed the following Schedule of rates, effective 5.11.2016 (the commencement date of the 2016 Amendment Act) — issued under the newly substituted Section 3, still well within both the old 40-paise and new ₹2/unit ceilings:

    Sl. No.	Category of consumer or consumption	Rate of Electricity Duty
    1	Irrigation Pumping and Agriculture (all supply voltages)	2% of energy charge
    2	L.T. Non-Industrial category	4% of energy charge
    3	Small Scale Industry [L.T. Industrial Supply]	5% of energy charge
    4	L.T. Industrial Category (excluding Small Scale Industry)	8% of energy charge
    5	H.T. Category	8% of energy charge
    6	E.H.T. Category	9% of energy charge
    7	Any person not being a licensee who generates energy for own use or consumption	30 paise/unit
    8	A licensee in its own premises	30 paise/unit
    9	Public water works and sewerage pumping, and Railway traction	Nil
    10	Open Access Power (other than captive power), or power supplied by special agreement, or free of cost by the licensee	Same as it would have availed power from licensee

    This largely retained the 2015 structure (2%–9% slabs; captive/licensee at 30 paise/unit) but formalized Open Access Power (other than captive) as a distinct category (Sl. No. 10), taxed the same as licensee-supplied power. The notification also attached explanatory clarifications defining each category by supply voltage/contract demand — for instance, Small Scale Industry/LT Industrial Supply (Sl. 3) covers industrial consumers at voltage ≤ 650 V with contract demand below 22 KVA, HT (Sl. 5) covers voltage above 650 V up to and including 33,000 V, and EHT (Sl. 6) covers voltage above 33,000 V.

11. 12.5.2017
    Captive Rate Sharply Increased

    Notification No. 3442 amended the 2016 notification, raising the rate for self-generators (Sl. 7) and licensee-own-premises (Sl. 8) from 30 paise to 55 paise per unit. This increase — beyond the old 40-paise cap — was made possible only by the ₹2/unit statutory ceiling introduced by the 2016 Amendment Act.

12. 26.5.2026
    Electrical Safety Inspection Deregulated — Notification No. 5728 ("Deregulation Phase II for 33kV")

    Notification No. 5728/En, dated 26.5.2026, marks a shift in a related but distinct regulatory track from electricity duty: the safety inspection and certification of electrical installations under the Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2023:

    • Self-certification up to 33 kV: installations connected at voltage up to 33 kV are now to be self-certified by the owner/supplier/consumer through a Chartered Electrical Safety Engineer (CESE) of their choosing, instead of mandatory government Electrical Inspectorate inspection.
    • Carve-outs retained under Electrical Inspector jurisdiction regardless of voltage: installations under Section 54 of the Electricity Act, 2003, and installations at mines, oil fields and railways.
    • Inspection periodicity unchanged from Notification No. 10317 dated 27.10.2022, whether inspected by the Electrical Inspectorate or a CESE.
    • OPTCL self-certification up to 765 kV: OPTCL installations may be inspected, tested and self-certified by OPTCL itself before commencement of supply.
    • Generating-plant commissioning-approval threshold raised to 500 KVA: no consumer may commission a self-generation plant above 500 KVA without the Electrical Inspector's written approval.

    Note on the 10 KVA → 50 KVA → 500 KVA progression: the 500 KVA figure governs a different mechanism than the duty-exemption thresholds tracked earlier in this chronology. The 10 KVA (1986 Act) and 50 KVA (2016 Act) thresholds concern exemption from electricity duty itself. The 500 KVA threshold here concerns Electrical Inspector approval to commission a plant — a safety/commissioning control, not a duty exemption; duty remains payable regardless. Read together, both moves reflect the same broader deregulatory direction over time.
13. 7.7.2026
    Utility Self-Certification Clarified — Notification No. 7819

    Notification No. 7819/En, dated 7.7.2026, issued in partial modification of Notification No. 5728, narrows who may self-certify installations belonging to power utilities: electrical installations belonging to OHPC, OPGC and the DISCOMs up to 33 kV shall be inspected, tested and self-certified by the utility's own qualified and authorised electrical engineers — rather than through an independently-engaged CESE as under the original May notification. Issued under the same 2023 Safety Regulations.

Captive / Self-Generation ED Rate Trajectory