The Federation of Jharkhand Chamber of Commerce and Industries (FJCCI), the apex trade body of the state, has appealed to the government to abolish the provision of paying duty on the consumption of power generated by diesel generator sets terming it “impractical”.

In a letter to the chief secretary and the secretaries of the industries and commercial taxes departments, the FJCCI pointed out that electricity consumers, particularly the owners of industrial units and business establishments, are forced to purchase and use generator sets only because the state-run discom (distribution company) is unable to provide adequate power supply. Hence, the traders who had to invest on DG sets for no fault of their own were burdened with the responsibility of paying electricity duty on energy produced by them.

“Charging electricity duty under such circumstances is unfair, particularly when the parent state Bihar (whose rules were adopted in toto at the time of creation of Jharkhand in 2000) abolished it in 2011,” it said.

Besides paying the duty, those using DG sets have also to bear the additional responsibility of filing quarterly and annual returns and informing about the assessment of power generation and consumption, it added.

“There is no justification of charging this electricity duty when Bihar has abolished it,” FJCCI president Praveen Jain Chabra told The Telegraph, adding that the compulsion of filing returns, etc also hampered the spirit of ease of doing business.

Though the provision has been in force since 2011, not many were even aware about their responsibility of paying taxes, he said, apprehending that they would now face the liability of paying penalty.

The duty charged is just 5 paise per unit and the tax authorities also accept the assessment of consumption submitted by the users but submitting those returns, etc, regularly is a cumbersome process, he said.

“The government should ensure uninterrupted power supply than forcing us to buy DG sets and spend over three times for getting power from alternative sources,” former FJCCI president Deepak Maroo said.

He said generating one unit by using DG set costs about Rs 21 if not more due to rising diesel prices instead of around Rs 6.50 per unit charged by the discom.

Though the provision of paying electricity duty for power generated by DG sets was there even earlier, the present problem cropped up after the commercial taxes department issued a notice on September 16.

The notice asked those using DG sets with a capacity of over 10kVa (kilo volt ampere) to get themselves registered under the provisions of the Jharkhand Electricity Duty (Amendment) Act, 2011, and pay duty latest by September 30, failing which they could face penalty charges.