Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003

1. (1) This Act may be called the Tamil Nadu Tax on Consumption or
Sale of Electricity Act, 2003.
Short title and
(2) It shall come into force on such date as the State Government commencement.
may, by notification, appoint.
Central 2. In this Act, unless the context otherwise requires,- Definitions
Act 1 of
1956 (1) "actual user of power" means one who is not a consumer but
uses power out of captive generating plant;
Central
Act X of (2) "captive generating plant" means a power plant set up by any
1910. person or association of persons or any Co-operative society to
generate electricity primarily for his own use or for the use of
members, and includes the power plants that are permitted to sell
the surplus power so generated.

(3) "Director" means the Director of Electricity Tax appointed by the

State Government ;

(4) "company" means a company registered under the Companies

Act, 1956 and includes anybody Corporate under a Central, State or
Provincial Act.

(5) "consumer" with its grammatical variations and cognate

expression means any person who is supplied with electricity on
payment of charges, or free of cost or otherwise by a licensee or by
the Government or by any other person engaged in the business of
supplying electricity to the public under the Indian Electricity Act,
1910 or any other law for the time being in force and includes -

(i) a licensee who consumes electricity whether generated by himself

or supplied to him by any other licensee; and

(ii) actual user of power or any other person who consumes electricity
generated by himself;

Explanation I.- Where a licensee consumes electricity, whether

generated by himself or supplied to him, such licensee shall be
deemed to be a consumer only in respect of the electricity so
consumed.

Explanation II.- Where a licensee or other person consumes energy

for purposes connected with the construction, maintenance and
operation of the generating transmitting and distributing system, such
licensee or person shall not be deemed to be a consumer in respect
 of the energy so consumed;

(6) "electricity" means electrical energy ;

(7) "energy charge" means the amount charged (whether as energy

charge or other charge) by a licensee for the supply of electricity to a
consumer before deduction of rebate, if any, allowed by the licensee
for payment on or before such date as may be specified by the
licensee, but does not include -

(i) meter charges;

(ii) interest on delayed payment ;

(iii) fuel surcharge ; or

Central (iv) fuse off call charges and reconnection charges

Act X of
1910. Explanation - I.- If electricity is supplied to any person free of charge
or at a concessional rate (other than tariff concession), the energy
Central charge would mean the tariff fixed by the Tamil Nadu Electricity
Act LIV Regulatory Commission in its Tariff Order to similar consumer.
of 1948.
Explanation - II.- "other charge" shall include demand charge and
power factor surcharge.

(8) "gross charge" means the aggregate amount of energy charge,

fuel surcharge and other charges, if any, made by the licensee for the
supply of electricity;
Tamil
Nadu
Act V of (9) "generating company" means any company or body corporate or
1920 association or body of individuals, whether incorporated or not or
artificial juridical person, which owns or operates or maintains a
generating station.
Tamil
Nadu
Act 21 of (10) "licensee" means any person licensed under part II of the
1994 Indian Electricity Act, 1910, to supply electricity and includes any
person who has obtained the sanction of the State Government
under section 28 of that Act, the State Government when it is
engaged in the business of supplying electricity, the generating
company as defined in clause (4-A) of section 2 of the Electricity
(Supply) Act, 1948, the Electricity Board and the captive
generating plant;

(11) "local authority" means-

(i) any Municipal Corporation established under any law for the time
being in force; or

Central (ii) any Municipal Council constituted under the Tamil Nadu District
Act X of Municipalities Act, 1920; or
1910.
Central (iii) any District Panchayat or any Panchayat Union Council or any
Act LIV Village Panchayat constituted under the Tamil Nadu Panchayats Act,
of 1948. 1994;
Central
Act 14 of (12) "net charge" means the amount of gross charge that remains
1998 after deduction there from of any rebate referred to in clause (7) of
this section or refund of fuel surcharge or other charges, if any.

(13) "supply" in relation to electricity means the sale of electricity to a

licensee or consumer.

(14) "tariff" means a rate of tariff livable upon the consumption of

electricity in the State supplied by the licensee and as fixed by the
Tamil Nadu Electricity Regulatory Commission ;

(15) "unit" means one kilowatt hours of energy.

(16) words and expressions used but not defined in this Act shall
have the meaning assigned to them in the Indian Electricity
Act,1910, Electricity (Supply) Act, 1948 and the Electricity
Regulatory Commission Act, 1998.

3. (1) Save as otherwise provided in this Act, every licensee and

every person other than a licensee shall pay every month to the
Government in the prescribed manner, a tax on the electricity sold or
consumed during the previous month at the rates specified
hereunder:

(a) In the case of licensees other than captive generating plants, the
rate shall be not less than 5% and not more than 10% of the net
charge, as may be notified by the Government ;

Provided that no tax shall be paid on sale of electricity for agricultural

purposes and hut service connections;

(b) In the case of licensees who are captive generating plants, the Tax on the
rate shall be not less than 10 paise and not more than 20 paise per consumption or sale
unit of electricity on the consumption for own use; and shall be not of electricity
less than 5% and not more than 10% on the net charge on the sale of
surplus electricity as may be notified by the Government ;

Provided that no tax shall be paid on the sale of electricity to the

Board.

(c) In the case of a person other than a licensee, the rate shall be not
less than 10 paise and not more than 20 paise per unit of electricity
on the consumption for own use as may be notified by the
Government ;

(2 ) The Government may pay such amount as may be prescribed as

collection charge to every person collecting electricity tax under this
section.

Provided that such amount shall not exceed one percent of the
electricity tax collected by such person.
4. Notwithstanding anything contained in this Act, no electricity tax Electricity sold for
 shall be payable under section 3, on the sale of electricity, by a consumption to
licensee to - Government local
authority or Railway
(a) any Government for consumption by that Government , save in Company not liable
Central respect of premises used for residential purposes; to Tax
Act 24 of
1989. (b) (i) any local authority, save in respect of premises used for
residential purposes;

(ii) Railway administration as defined in the Railways Act, 1989, save

in respect of premises used for residential purposes.
5. (1) Every person, other than a licensee or the State Government, Registration:
who has installed or proposes to install a generating plant for
generation of electricity for his own consumption, shall register his
name with such officer as the Government may appoint in this
behalf.

(2) The application for registration shall be made in such manner and
in such form and on payment of such fee as may be prescribed.

(3) The officer appointed in this behalf may, on receipt of an

application and after such enquiry as he considers necessary, grant
to the applicant a certificate of registration for such plant, for such
period and on such conditions as may be prescribed.
6. (1) Any licensee may with the previous sanction of the Licensee to
Government and subject to such conditions as they may impose, reimburse himself
recover from any person or class of persons to whom electricity is from consumer in
sold, the electricity tax which falls to be paid by the licensee in certain cases:
respect of the electricity so sold, or any part of it as may be
determined by the Government.

Explanation.- Save as provided in section 4 of this Act, the electricity

tax recoverable from any person under this section shall not be
deemed to be part of the electricity charges charged by the licensee.

(2) Licensee may for the purpose of sub-section (1) exercise the
powers conferred on a licensee by sub -section (1) of section 24 of
Indian Electricity Act, 1910 for the recovery of any charge or sum due
in respect of energy supplied by him.
Central
Act X of
1910.

7. Any electricity tax due under this Act which remains unpaid - Recovery of
Electricity Tax:
(a) shall be deemed to be in arrears and thereupon interest at the
rate prescribed by the Government, from time to time, shall be
payable on such electricity tax; and

(b) shall, together with any interest payable under clause (a) be
recoverable either as an arrear of land revenue or by deduction from
any amount payable by the Government to the licensee.
8. Every licensee and every person other than a licensee
(a) keep books of account in the prescribed form ; and Obligation of
licensees to keep
(b) submit returns showing the units of electricity supplied and the books of account
amount of the electricity tax payable in respect thereof, to the and to submit return:
Director in such form and within such time as may be prescribed:

Provided that every person other than a licensee, who has registered
his name under section 5 shall quote the registration number in all
books of accounts and returns submitted to the Director.
9. (1) If no return in respect of any period is submitted by a licensee Assessment
or a person required to submit return under section 8 or if the return
submitted by such licensee or person appears to the Director to be
incorrect or incomplete the Director shall, after giving such licensee
or person as the case may be, a reasonable opportunity of being
heard, proceed in such manner as may be prescribed to assess to
the best of his judgment the amount of electricity tax payable under
this Act by such licensee or person.

(2) The amount of electricity tax assessed under sub-section (1) for a
period less the sum, if any, already paid in respect of the said period,
shall be paid by the licensee or the person by such date as maybe
specified in a notice issued by the Director in this behalf and the date
to be specified shall be ordinarily not less than 30 days from the date
of service of such notice.

(3) No assessment under this section shall be made after the expiry
of four years.

Explanation.- For the purpose of this section, "year" means the year
commencing on the first day of April and ending on the last day of
March.
10. (1) Any person may in the prescribed manner appeal to the Appeal.
Government against any order of assessment of Electricity Tax within
sixty days or such further period as may be allowed by the
Government for reasons shown to their satisfaction from the date of
receipt of a notice of demand issued after such order of assessment.

Provided that no appeal against an assessment of electricity tax

shall be entertained by the Government unless they are satisfied that
such amount of electricity tax as the appellant may admit to be due
from him has been paid.

(2) The Government in disposing of any appeal under sub-section

(1) may -

(a) confirm, modify or annul the assessment of electricity tax; or

(b) set aside the assessment of electricity tax and direct the Director
to make a fresh assessment after such further inquiry as may be
directed.
11. The Government shall in the prescribed manner, pay a simple Interest payable by
interest at the rate not exceeding four per cent per annum as may be Government.
prescribed in this behalf, for each calendar month of delay in making
refund to a licensee the amount of electricity tax paid in excess which
arises from an order passed on appeal under section 10.
 12. (1) The Government may, by notification, appoint the Electricity
Tax Inspecting Officers to inspect the prescribed books of account
Central kept under section 8. Electricity Tax
Act XLV Inspecting Officers.
of 1860 (2) Every Inspecting Officer appointed under this section shall be
deemed to be a public servant within the meaning of section 21 of the
Indian Penal Code.
Central 13. (1) Subject to the provisions of any rules made by the State Powers of Electricity
Act 2 of Government in this behalf, an Inspector may - Tax Inspecting
1974. Officers.
(i) require production for inspection of such books and records as
may be necessary for ascertaining or verifying the amount of
electricity tax leviable under the Act.

(ii) enter and search any premises where electricity is, or is believed
to be supplied, for the purpose of -

(a) verifying the statements made in the books of account kept, and
returns submitted, under section 5,

(b) testing the reading of meters,

(c) verifying the particulars required in connection with the levy of

electricity tax.

(iii) exercise such powers and perform such other functions as may
be necessary for carrying out the purposes of this Act or the rules
made there under.

(2) All searches made under sub-section (1) shall be made in

accordance with the provisions of the Code of Criminal Procedure,
1973.
14. The Government may, by notification, make an exemption or
reduction in rate in respect of the electricity tax payable under this
Act on energy sold for consumption by or in respect of any - Exemption and
reduction of tax.
(i) institution or class of persons;

(ii) place of public worship, public burial or burning ground or other

place for the disposal of the dead;

(iii) premises declared by the State Government to be used

exclusively for purposes of public charity;

(iv) vessel whether seagoing or inland.

15. (1) The Government may, make rules to carry out the purposes of Power to make
this Act. rules.

(2) In particular and without prejudice to the generality of the

foregoing power, such rules may provide for -

(a) the time and manner of payment of the electricity tax under
section 3 ;
(b) the form of the books of accounts to be kept and the times at
which, the form in which and officers to whom the returns under
section 8 shall be submitted;

(c) the powers and duties of Inspecting Officers;

(3) All rules made under this Act shall be published in the Tamil
Nadu Government Gazette and unless they are expressed to come
into force on a particular day, shall come into force on the day on
which they are so published.

(4) Every rule or order made under this Act shall, as soon as
possible, after it is made, be placed on the table of the Legislative
Assembly, and if, before the expiry of the session in which it is so
placed or the next session, the Legislative Assembly agrees in
making any modification in any such rule or order or the Legislative
Assembly agrees that the rule or order should not be made, the rule
or order shall thereafter have effect only in such modified form or be
of no effect, as the case may be, so however, that any such
modification or annulment shall be without prejudice to the validity of
anything previously done under that rule or order.
16. If any difficulty arises in giving effect to the provisions of this Act, Power to remove
the Government may, by an order published in the Tamil Nadu difficulties
Government Gazette, make such provisions, not inconsistent with the
provisions of this Act, as appears to them necessary or expedient for
removing the difficulty.
17. (1) Where an offence punishable under this Act has been Offences by
committed by a company, every person, who, at the time the offence companies.
was committed, was in-charge of, and was responsible to, the
company for the conduct of the business of the company, as well as
the company, shall be deemed to be guilty of the offence and shall be
liable to be proceeded against and punished accordingly ;

Provided that nothing contained in this sub-section shall render any

such person liable to any punishment, if he proves that the offence
was committed without his knowledge or that he had exercised all
due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where any

offence under this Act has been committed by a Company and it is
proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be proceeded against
and punished accordingly.

Explanation.- For the purpose of this section-

(a) "company" means any body corporate and includes a firm,

society, trust or other association of individuals; and

(b) "director" in relation to-

(i) a firm means a partner in the firm

 (ii) a society, trust or other association of individuals means the
person who is entrusted under the Rules of the society, trust or other
association with the management of the affairs of the society, trust or
other association, as the case may be.
18. No suit, prosecution or other legal proceeding shall lie against Protection of action
any person for anything which is in good faith done or intended to be taken in good faith.
done under this Act.
19. If any person - Penalties.

(a) liable under section 8 to keep books of account or to submit

returns, fails to keep or submit the same in the manner prescribed; or

(b) intentionally obstructs an inspecting officer appointed under

section 12 in the exercise of his powers or the performance of his
duties under this Act or the rules made there under; or

(c) contravenes any rule made under this Act;

he shall be punished with fine which may extend to ten thousand

rupees.

Tamil 20. (1) The Tamil Nadu Electricity Duty Act, 1939 and the Tamil Repeal and savings.
Nadu Nadu Electricity (Taxation on Consumption) Act, 1962 is hereby
Act V of repealed.
1939.
Provided that such repeal shall not affect -
Tamil
Nadu (a) the previous operation of the said Acts or anything duly done or
Act IV of suffered there under;
1962.
(b) any right, privilege, obligation or liability, acquired, accrued or
incurred under the said Acts;

(c) any penalty, forfeiture or punishment incurred in respect of any

offence committed against the said Act;

(d) any investigation, legal proceeding (including assessment

proceeding) or remedy in respect of any such right, privilege,
obligation, liability, forfeiture or punishment as aforesaid and any
such investigation, legal proceeding or remedy may be instituted,
continued or enforced and any such penalty, forfeiture or punishment
may be imposed as if this Act had not been passed;

(2) Notwithstanding such repeal,-

(a) anything done or any action taken or purported to have been

done or taken including any rule, notification, inspection order or
notice made or issued or any direction given under the repealed
laws, shall so far as it is not inconsistent with the provisions of this
Act, be deemed to have been done or taken under the corresponding
provisions of this Act.

(b) any duty levied under the repealed Tamil Nadu Electricity Duty
 Act, 1939 and the rules made there under during the period prior to
the commencement of this Act, but not collected, may be recovered
Tamil in the manner provided under the repealed Act and rules made there
Nadu under.
Act V of
1939 (c) any tax levied under the repealed Tamil Nadu Electricity (Taxation
on Consumption) Act, 1962 and the rules made there under during
the period prior to the commencement of this Act, but not collected,
may be recovered in the manner provided under the repealed Act
Tamil and the rules made there under.
Nadu
Act IV of (3) For the removal of doubts it is hereby declared that nothing in
1962 sub-section (1) shall be construed as preventing any person from
claiming refund of any tax or duty paid by him in excess of the
amount due from him under the repealed Acts and the rules made
there under.

21. This Act shall have effect subject to the provisions of Article 288 Act to be subject to
of the Constitution Article 288.