Punjab Govt Approves New Electricity Duty for Industrial and Commercial Consumers 2025
The Punjab Assembly has passed the Punjab Finance (Amendment) Bill 2025, introducing a new electricity duty aimed at expanding the province’s tax base and ensuring fair contribution from high-power consumers. The bill proposes a 4 paisa per unit duty on industrial and commercial users consuming more than 500 kVA of power, while keeping all domestic consumers fully exempt.
Details of the Punjab Finance (Amendment) Bill 2025
The Punjab Finance (Amendment) Bill 2025 was approved by the Punjab Assembly without being referred to any committee — a move that shows the government’s urgency to implement fiscal reforms. The bill amends the Punjab Finance Act 1964 and now awaits final approval from the Governor of Punjab before being enforced.
According to the new legislation:
- 4 paisa per unit duty will be levied on industrial and commercial consumers using more than 500 kVA.
- Consumers using up to 500 kVA will remain completely exempt.
- Domestic electricity users will not be affected by this duty.
How the New Electricity Duty Will Be Collected
The new system differentiates between grid-connected and private power users to ensure smooth collection:
- For consumers connected to the national grid, the duty will be collected through DISCOs (distribution companies) such as LESCO, FESCO, MEPCO, and others.
- For users generating power through private electricity sources or generators exceeding 500 kVA, the duty will be collected by electric inspectors.
This dual system ensures that no large-scale energy consumer escapes taxation, whether connected to the grid or using private generation systems.
WhatsApp ChannelExemptions for Domestic Consumers
One of the major highlights of the bill is the complete exemption for domestic consumers. The government has clearly stated that the new electricity duty will not apply to household electricity users, ensuring that the additional burden remains limited to commercial and industrial sectors.
Officials noted that this step was taken to protect residential consumers from any additional financial pressure amid rising inflation and electricity costs.
Purpose of Introducing the New Duty
According to the Punjab government, this new electricity duty is designed to expand the tax base and improve provincial revenue without impacting low-usage or residential customers. The measure also aims to:
- Increase revenue collection from high-power commercial and industrial users.
- Ensure equitable taxation between small and large electricity consumers.
- Support Punjab’s fiscal stability and public development projects.
A provincial finance department spokesperson stated that these reforms are part of a broader fiscal policy to improve financial sustainability and reduce reliance on federal transfers.
Economic Impact and Reactions
Economic experts believe the decision could have mixed effects on Punjab’s economy. While it will help the government increase revenue, it may also raise operating costs for large industrial and commercial units already facing high production expenses.
Some business groups have expressed concern that the added duty could affect competitiveness, especially for industries struggling with energy costs. However, analysts say that the 4 paisa per unit rate is relatively modest and unlikely to significantly impact production unless further increases are introduced later.
Awaiting Governor’s Approval
The Punjab Finance (Amendment) Bill 2025 has been passed by the provincial assembly and now awaits final approval from the Governor of Punjab. Once signed, the new law will come into effect immediately across the province.
This marks a significant policy change in Punjab’s energy taxation structure, focusing on expanding the provincial revenue network while keeping residential users protected from additional costs.
Key Takeaways
| Category | Electricity Duty Status | Collection Method |
| Domestic Consumers | Exempt | N/A |
| Industrial & Commercial (≤500 kVA) | Exempt | N/A |
| Industrial & Commercial (>500 kVA) | 4 paisa per unit | DISCOs |
| Private Generators (>500 kVA) | 4 paisa per unit | Electric Inspectors |
Final Thoughts
The Govt of Punjab’s decision to introduce a new electricity duty marks a significant fiscal reform under the Punjab Finance (Amendment) Bill 2025. By targeting high-energy industrial and commercial users, the government aims to enhance provincial revenue while maintaining fairness and social protection for domestic households.
As soon as the Governor of Punjab grants approval, the new 4 paisa per unit duty will be implemented province-wide, officially bringing large-scale power consumers into the provincial tax net.
