Sales tax to be imposed on sale of electricity

MUMBAI, AUG 8: Electricity in Mumbai may become costlier as the State Cabinet on Tuesday decided to impose sales tax on sale of electricit...

MUMBAI, AUG 8: Electricity in Mumbai may become costlier as the State Cabinet on Tuesday decided to impose sales tax on sale of electricity generated by private licence holder companies in the State.

"The private power generation companies like Tata Electric Company and BSES will be charged sales tax at a rate of 10 paise per unit on the power sold by them," Chief Minister Vilasrao Deshmukh announced in the post-cabinet press briefing.

The new decision, however, will not be applicable to the Maharashtra State Electricity Board, a government undertaking. The Government is expecting an additional revenue of Rs 111 crore by imposing this sales tax, he said. The decision will come into force immediately.

The decision was not unexpected as Finance Minister Jayant Patil had announced it during the budget session of the State Legislature early this year. An amendment would be incorporated in the Maharashtra Sales Tax Act, 1963 for the purpose, Patil said.

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