Centre, Deloitte studying impact of GST on power

As the government looks to bring electricity under goods and services tax (GST), the Union power ministry is looking at its likely impact on the industry, states’ revenue and household electricity bills. Electricity is one of several commodities like petrol, diesel and natural gas that have so far remained out of the purview of GST.

- Rituraj Baruah & Gireesh Chandra Prasad

Audit and consulting firm Deloitte, which was appointed to analyse the impact of the move, submitted a report to the power ministry that showed the move would benefit industry by lowering its outgo in levies. The ministry has now sought the likely impact of the move on the revenue of states and the electricity bills of retail or domestic power consumers, two people aware of the matter said.

“We have got the view of the industry. GST is expected to make electricity cheaper for industry because it will be able to get input tax credit. But we have not got the perspective of the states and the domestic consumers. And how the move will impact the budget of households," said one of the people mentioned above.

The person further said most of the states opposed the move in a meeting held to know their views as they may lose out on receivable electricity duties. “Some states have higher rates of duty, some have lower rates. The ministry wants to see the overall scenario—which states will lose how much," one of the people mentioned above said. The person added that while the move would smoothen things for industry, “we need to know the impact on the domestic sector, which is politically more sensitive".