Punjab Govt Introduces New Electricity Duty for Industrial & Commercial Users (2025 Update)

The Government of Punjab has approved the Punjab Finance (Amendment) Bill 2025, introducing a new electricity duty on high-power industrial and commercial consumers. This reform aims to expand the provincial tax base while keeping domestic households fully exempt from any additional burden.

🔹 Overview of the Punjab Finance (Amendment) Bill 2025

The Punjab Assembly recently passed the Punjab Finance (Amendment) Bill 2025 without referring it to any committee — reflecting the government’s urgency to implement fiscal reforms.

Under the new bill, a 4 paisa per unit electricity duty will be applied to industrial and commercial users consuming over 500 kVA of power. All domestic consumers and small businesses (≤500 kVA) will remain completely exempt.

Key Highlights of the Bill:

• ✅ 4 paisa per unit duty on industrial & commercial consumers using >500 kVA

• ✅ Consumers using ≤500 kVA – Exempt

• ✅ Domestic households – Fully exempt

Once the Governor of Punjab signs the bill, it will officially become law and take effect across the province.

⚙️ How the New Electricity Duty Will Be Collected

To ensure efficient and transparent collection, the government has outlined two separate systems:

1. Grid-Connected Consumers – Duty will be automatically collected through DISCOs such as LESCO, FESCO, MEPCO, and others.

2. Private Power Generators (>500 kVA) – Duty will be collected by electric inspectors appointed by the provincial energy department.

This dual collection system ensures that both grid-connected and off-grid industrial users contribute fairly, closing tax loopholes in large-scale power usage.

🏠 Domestic Consumers Remain Fully Protected

The Punjab government has made it clear that household electricity users will not be affected by this new duty.
Officials emphasized that protecting domestic consumers from extra costs amid inflation and rising energy prices was a top priority.

This policy ensures that only high-consumption industrial and commercial users share the additional fiscal responsibility.

💡 Purpose Behind the New Electricity Duty

The main goal of this new electricity duty is to increase provincial revenue without burdening small businesses or households. The move supports the province’s broader fiscal sustainability strategy by:

• Enhancing revenue collection from high-power consumers

• Ensuring fair and equitable taxation

• Reducing dependence on federal transfers

• Funding development and public welfare projects in Punjab

A spokesperson from the Punjab Finance Department said that these reforms are part of a long-term effort to strengthen provincial finances and stabilize public funding.

📊 Economic Impact and Industry Response

Experts believe the reform will have mixed effects on Punjab’s economy.

While it will boost provincial revenue, it could slightly increase operational costs for large factories and commercial entities already managing high electricity expenses.

However, analysts note that 4 paisa per unit is a minimal rate, unlikely to cause significant financial pressure unless raised further in future amendments.

Some business associations have requested consultation on future energy taxes, emphasizing the importance of maintaining Punjab’s industrial competitiveness.

🏛 Awaiting Final Approval from Governor Punjab

After the Punjab Assembly’s approval, the bill now awaits the Governor’s signature. Once approved, the Punjab Finance (Amendment) Bill 2025 will come into force immediately, marking an important change in the province’s energy taxation structure.

This reform reflects Punjab’s commitment to fiscal transparency, efficient taxation, and social protection for ordinary citizens.

📌 Key Takeaways (Summary Table)

📝 Final Thoughts

The Punjab Government’s decision to introduce a new electricity duty marks a significant fiscal step aimed at broadening the tax network and ensuring fair contribution from large power consumers.

By focusing on industrial and commercial sectors while keeping households safe from new charges, the government seeks to balance economic growth with fiscal responsibility.

Once the Governor’s approval is granted, the 4 paisa per unit duty will officially apply province-wide — a move expected to strengthen Punjab’s financial base and support future development initiatives.

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