Gujarat Electricity Duty Act, 1958
Electricity Duty Exemption in Gujarat: 100% for 5 years
New factories in Gujarat pay no electricity duty for five years from the day they start production — ten years for a new unit in an SEZ. That is the 15% duty on an HT bill (10% on LT) and 60 paise a unit on captive DG power. Expansions and additional units outside an SEZ qualify too, on their own consumption. The exemption is not automatic: it needs an eligibility certificate from CEICED.
20+ years in Gujarat incentives300+ projects99% filing success
NeoApex Saver is a private advisory firm, not a government body. The exemption is granted by the government department concerned.
Example: ₹15 lakh of monthly HT consumption charges carries ₹2.25 lakh of electricity duty at 15% — ₹0 for a new unit for five years (ten in an SEZ).
- 100%of the duty, for 5 years
- 10 yrsnew units in an SEZ
- 60 paiseper unit on captive DG power
On this page
What is electricity duty in Gujarat?
Electricity duty is a State tax on electricity consumed, levied under the Gujarat Electricity Duty Act, 1958. Your DISCOM adds it to every bill and pays it to the State. Factories pay 15% of consumption charges on HT connections and 10% on LT, and 60 paise a unit on power they generate and use themselves.
Swipe sideways to see every column
| Consumption | Duty |
|---|---|
| Industrial — HT supplyvoltage above 650 volts | 15%of consumption charges |
| Industrial — exclusively LTup to 650 volts | 10%of consumption charges |
| Self-generated power used by an industrial undertakingcaptive DG sets and power plants | 60 paise a unitsince 1 August 2019 |
What “consumption charges” means. Duty is worked out on what you pay the DISCOM for power, excluding meter charges, interest on delayed payment, fuse-off call and reconnection charges, and transmission and transformation losses. Whether your bill comes from UGVCL, MGVCL, DGVCL, PGVCL or Torrent Power, the duty line — and the exemption — work the same way.
Electricity duty exemption is separate from the power tariff subsidy of ₹1–2 a unit under the Viksit Gujarat Industrial Policy 2026. It is a statutory exemption under the Electricity Duty Act, so it does not use up any of the VGIP 2026 combined ceiling — the two run side by side.
Who gets the exemption, and for how long
A new industrial undertaking is exempt for 5 years from the date it first manufactures or produces goods (Section 3(2)(vii)). An additional unit or expansion of an existing undertaking gets 5 years on its own consumption (Section 3(2)(viii)). A new unit in an SEZ gets 10 years; an expansion inside an SEZ does not qualify. Each needs a certificate of eligibility.
New industrial undertaking
Full exemption on power used for motive power and lighting in the factory, for five years from the day production starts — MSME or large, anywhere in Gujarat.
Expansion or additional unit
An identifiable new unit of an existing undertaking — at a new site, or inside the existing premises on its own meter or sub-meter. Duty is waived on that unit’s consumption.
New unit in an SEZ
A new unit in a Special Economic Zone gets a ten-year exemption. It is for new units only — an expansion or additional unit inside an SEZ does not qualify for the exemption at all.
Qualifies
- Units that manufacture or produce goods, including job work that results in manufacture
- MSMEs and large units alike, in GIDC estates, private parks or standalone sites
- Units set up in an existing or rented building — buildings stopped counting in 2020
- Office premises of the factory (counted as industrial purpose since 2013)
- Captive DG sets used by the eligible unit, applied for alongside
Does not qualify
- A unit formed by splitting up or reconstructing a business already in Gujarat
- A unit formed by moving plant and machinery already used in India, beyond the limit the State notifies
- Staff housing, commercial space, canteen, club, sports and library premises
- An expansion or additional unit inside an SEZ — the SEZ exemption is for new units only
- Trading and service businesses that do not manufacture
- Eateries — food or drinks consumed on the premises are excluded from “industrial undertaking”
Where it matters most. In power-hungry clusters, 15% of the power bill is real money — and the five-year window is worth planning before the connection is released.
- Ankleshwar, Dahej, Vapi — chemicals and pharma
- Sanand, Changodar, Becharaji — auto components
- Halol, Savli, Vadodara — engineering
- Surat, Hazira — textile processing
- Kutch — steel, pipes
- Morbi — ceramics
- Rajkot, Jamnagar — engineering, brass, foundries
Expansion and additional units: the 50% plant & machinery test
For electricity duty, an expansion or additional unit outside an SEZ qualifies when its new plant & machinery is at least 50% of the gross block of the existing plant & machinery. Building cost is not counted. The waiver then applies to the new unit’s own, separately metered consumption, for 5 years from the day it starts production. Inside an SEZ, only new units are exempt.
The test is narrower than the one the Viksit Gujarat Industrial Policy uses for expansions. The Gujarat Electricity Duty (Amendment) Act, 2020 took building out of the investment criteria for both new and additional units — the State’s stated aim was “plug and play”: new machinery in any building.
Swipe sideways to see every column
| Point of comparison | Electricity duty exemption | VGIP 2026 subsidies |
|---|---|---|
| What is measured | New plant & machinery against the gross block of existing plant & machinery | Gross fixed capital investment (excluding land), with at least 60% in plant & machinery |
| Threshold | 50% | 50%plus a 50% rise in installed capacity |
| Building | Not counted | Counted |
| Benefit | 100% of the duty on the new unit’s consumption for 5 years | Capital, interest and power tariff subsidy within the combined ceiling |
| Law | Section 3(2)(viii), Gujarat Electricity Duty Act, 1958 | VGIP 2026 GRs |
Example. Existing plant & machinery with a gross block of ₹20 crore needs at least ₹10 crore of new plant & machinery in the expansion. A new shed or civil work does not help reach that number — machinery does.
Put the expansion on its own meter or sub-meter before it starts production. Without a separate reading the DISCOM cannot tell the exempt units from the rest, and the Rules charge mixed consumption at the higher rate.
Electricity duty exemption calculator
Enter your monthly bill and connection type — or, if you do not have a bill yet, your contract demand in kVA and we estimate the bill for two-shift operation. The calculator applies 15% (HT) or 10% (LT) and runs it for 5 years, or 10 for a new SEZ unit.
Estimated electricity duty saved
—
Enter your monthly bill, or your contract demand, to see the saving.
- Monthly consumption charges—
- Duty on the bill each month—
- Duty saved per year—
- Exemption period—
Indicative only. It assumes a steady monthly bill and applies the Schedule rates to consumption charges. Captive DG power (60 paise a unit) is extra. The actual exemption runs from your date of production and depends on the certificate CEICED issues.
Get this estimate checkedWhat the exemption is worth: three examples
Round numbers, standard rates. The saving is simply the duty you would otherwise pay: bill × duty rate × 12 months × years of exemption.
DG sets and captive power: file alongside
Power you generate and use yourself attracts electricity duty of 60 paise a unit (since 1 August 2019). For an eligible new unit, the DG set goes into the same exemption application, so its units are exempt for the same period. DG sets up to 125 kVA are exempt; above 125 kVA the 60-paise duty applies.
- Duty on captive generation
- 60 paise per unit generated and consumed, for industrial undertakings — Schedule II, item 4.
- Up to 125 kVA
- Exempt from electricity duty, but the set must still be registered.
- Above 125 kVA
- Register the generating set with the Commissioner of Electricity Duty (since January 2024 the Chief Commissioner of State Tax), meter the generation and file periodic returns (Rule 9).
- Timing
- Include the DG set in the main exemption application — adding it later only earns the remaining part of the period.
- Safety approval
- Electrical-safety approval of the installation by the Electrical Inspectorate, where the CEA safety regulations require it, is a separate step from the duty exemption.
Registration, returns and the exemption for generators are covered in detail on our DG set registration page.
Furnace units: a lower duty rate for life
Separately from the five-year exemption, eligible furnace-based units on HT connections pay electricity duty at 10% instead of 15% — for as long as the unit runs. On consumption charges of ₹40 lakh a month that is ₹2 lakh a month, or ₹24 lakh a year.
The Act allows the State to reduce the duty for particular processes — electro-chemical, electrolytic and electro-metallurgical — and classes of consumers (Section 3(3)). For furnace units the lower rate comes through a sanction order and applies from its date, not retrospectively. It matters most to foundries in Rajkot and steel melters in Bhavnagar and Kutch.
A new furnace unit claims the five-year exemption first; the concession matters from the day duty becomes payable again. Eligibility turns on how your connection and process are classified — see furnace duty reduction.
How to apply for electricity duty exemption on CEICED
Apply online to CEICED within 90 days of the date of production, with proof of investment, the connection and the production date. Under Rule 11(3) of the Bombay Electricity Duty (Gujarat) Rules, 1986, a late application loses the exemption for the months that pass — and the five-year window is not extended.
Plan it at the project stage
Take the new HT or LT connection in the unit’s own name; meter staff housing and other non-industrial premises separately; keep invoices that show every machine is new or imported; and plan a sub-meter for an expansion.
Before the connection is releasedFix the date of production
The five years run from the day the unit first manufactures or produces goods — not from the first bill or the certificate. Keep the first production record and sales invoice.
Day one of productionApply on CEICED e-services
File online with the Chief Electrical Inspector & Collector of Electricity Duty — proof of investment, the connection and the production date — and include your DG sets in the same application.
Within 90 days of productionAnswer queries and inspection
The office may ask for clarifications or inspect the premises. Replies should match the invoices, meter details and dates already filed.
Certificate to DISCOM, refund claim
Send the eligibility certificate to your DISCOM so bills stop carrying the duty, and claim back duty billed after the date of production.
As soon as it is issuedStay compliant to the end
Keep the metering, returns and assets as filed until the five (or ten) years end — then diary the date duty resumes.
Through the period
Compliance during the exemption period
- Separate metering
- Keep industrial consumption metered separately from housing and other premises; mixed use without separate meters is charged at the higher rate (Rule 10).
- Check every bill
- Once the certificate is with the DISCOM, the duty line should read zero. Duty billed after the date of production can be claimed back.
- Captive generation
- Keep the generation meter sealed and file the periodic returns for DG sets or captive plants on time.
- Assets and structure
- Do not move used machinery in from another unit or split the undertaking; report changes of name, constitution or load.
- Disputes
- Questions of eligibility or classification go to the authority the State notifies; appeal to the State Government lies within 60 days (Schedule I, Part II).
- Arrears
- Duty not paid on time attracts interest of up to 24% a year under Section 8, recoverable as arrears of land revenue.
Where units lose the exemption
- Waiting for the first bill.The clock starts on the day production starts. Months spent waiting are months of exemption lost.
- Filing late.A late application does not move the start date — it forfeits the lapsed period.
- Expansion on the same meter.Without a sub-meter the expansion’s exempt units cannot be measured.
- Counting the building.The 50% expansion test looks only at plant & machinery.
- Shifting old machinery.Plant already used in India, moved in from a sister unit, can disqualify a “new” unit.
- Forgetting the DG set.Add it to the main application; adding it later earns only the remaining period.
- Colony on the factory meter.Housing, canteen and club loads are not industrial purpose.
- Treating it as part of the VGIP ceiling.It isn’t — claim both the exemption and the power tariff subsidy.
Electricity duty exemption across Gujarat’s industrial belts
Electricity duty rates in Gujarat are set by the Act, not by the DISCOM — 15% on HT supply, 10% on LT, 60 paise a unit on self-generated power — so the saving per unit is the same in Vapi, Sanand or Anjar. What differs is the load. New industrial units in Gujarat qualify from the first day of production wherever they sit; the exemption does not depend on the taluka category, and it runs alongside the VGIP 2026 power tariff subsidy. These are the belts where we file most often, and what the five-year window is typically worth there.
South Gujarat — DGVCL
Bharuch, Ankleshwar, Jhagadia, Panoli, Dahej and Vagra; Surat, Hazira and Sachin; Vapi, Sarigam, Umbergaon and Valsad. Chemicals, pharma and textile processing on HT connections, where the duty is 15% of every month’s consumption charges. Torrent Power bills Surat city and the Dahej SEZ, where a new unit gets ten years.
Ahmedabad belt — UGVCL
Sanand, Changodar, Bavla, Vatva, Naroda and Kathwada; Dholera SIR; Kadi, Mehsana, Becharaji, Mandal and Himmatnagar. Auto components, engineering, FMCG and pharma, mostly on HT; Torrent Power serves Ahmedabad city and Gandhinagar. Expansions are common here, so the 50% plant and machinery test decides most files.
Vadodara — MGVCL
Vadodara, Halol, Savli, Waghodia, Nandesari and Karjan; Anand and Nadiad. Capital goods, chemicals and auto plants with furnaces and large DG sets, so the furnace rate and the DG-set registration usually go in the same file.
Kutch — PGVCL
Gandhidham, Anjar, Mundra, Bhuj and Bhachau. Steel, pipes, timber and edible oil near the ports; the Mundra SEZ gives a new unit ten years, while an expansion inside the SEZ does not qualify.
Also served. Saurashtra on PGVCL — Rajkot, Morbi, Jamnagar, Bhavnagar and Surendranagar — where ceramics, engineering and brass units file the same way.
- Bharuch
- Hazira
- Changodar
- Mehsana
- Dholera
- Himmatnagar
- Vadodara
- Gandhidham
- Anjar
- Surendranagar
Whichever DISCOM bills you, the application goes to CEICED within 90 days of the date production starts, and the certificate is issued on the unit’s own connection. Send us the connection number and the production date and we confirm the saving before you file.
Electricity duty exemption: questions we get asked
What is the electricity duty exemption in Gujarat?
A 100% waiver of the State’s electricity duty — 15% of consumption charges on HT and 10% on LT connections — for 5 years from the date a new industrial undertaking starts production, under Section 3(2)(vii) of the Gujarat Electricity Duty Act, 1958. Additional units and expansions outside an SEZ get 5 years under Section 3(2)(viii); new units in an SEZ get 10 years. It needs a certificate of eligibility from CEICED.
How much electricity duty do industries pay in Gujarat?
15% of consumption charges on HT connections (supply above 650 volts) and 10% for units exclusively on LT, plus 60 paise a unit on power an industrial undertaking generates for its own use (since 1 August 2019). Consumption charges exclude meter charges, delayed-payment interest, fuse-off and reconnection charges and transmission losses.
Is the exemption automatic for new units or GIDC units?
No. Every eligible unit, in a GIDC estate or elsewhere, must apply to CEICED and obtain the certificate; the DISCOM keeps charging duty until it has one.
What is the time limit to apply?
Apply within 90 days of the date production starts (the date the unit first manufactures or produces goods). The five years run from that date whether or not you have applied, and under Rule 11(3) of the Bombay Electricity Duty (Gujarat) Rules, 1986 a late application loses the exemption for the lapsed period, unless the State condones a delay beyond your control.
Does an expansion qualify for electricity duty exemption?
Yes, outside an SEZ, as an additional unit — if its new plant and machinery is at least 50% of the gross block of the existing plant and machinery (building is not counted) and its consumption is separately metered. The exemption runs for 5 years from the date the expansion starts production and applies only to its own consumption. An expansion inside an SEZ does not qualify.
How long is the exemption for a unit in an SEZ?
10 years for a new unit in a Special Economic Zone, under the Gujarat Special Economic Zone Act, 2004. It is for new units only: an expansion or additional unit inside an SEZ does not get the exemption.
Is electricity duty exemption part of the Viksit Gujarat Industrial Policy 2026 ceiling?
No. It is a statutory exemption under the Gujarat Electricity Duty Act, so it does not use any of the combined ceiling for capital, interest and power tariff subsidy. The ₹1–2 a unit power tariff subsidy and the duty exemption can run together.
Can a unit with second-hand machinery claim the exemption?
A unit formed by transferring plant and machinery already used in India beyond the limit the State notifies is not a new industrial undertaking. Machinery imported second-hand has not been used in India. Buildings no longer count at all after the 2020 amendment, so a unit can start in an existing shed.
Does the exemption cover DG set power?
Yes. DG sets up to 125 kVA are exempt from electricity duty. Above 125 kVA, self-generated power attracts 60 paise a unit, which is covered for the exemption period when the DG set is included in the application.
Which department grants the electricity duty exemption?
The Chief Electrical Inspector and Collector of Electricity Duty (CEICED), under the Energy and Petrochemicals Department, Government of Gujarat, through its online e-services. Your DISCOM — UGVCL, MGVCL, DGVCL, PGVCL or Torrent Power — then stops charging duty on your bill.
What is the furnace duty reduction?
A separate, lifetime concession: eligible furnace-based units on HT connections pay duty at 10% instead of 15% from the date of the sanction order. It is not retrospective and is applied for separately from the five-year exemption.
Legal basis and official sources
Every rate and rule on this page is taken from the Gujarat Electricity Duty Act, 1958 as amended to 2020, the 2019 amendment that set the captive-power rate, and the Bombay Electricity Duty (Gujarat) Rules, 1986.
Gujarat Electricity Duty Act, 1958
Sections 3(2)(vii) and (viii), both Schedules, and the 2020 amendment that removed building from the investment test.
Download PDFGujarat Electricity Duty (Amendment) Bill, 2019
Raised the duty on self-generated industrial power from 55 to 60 paise a unit, from 1 August 2019.
Download PDFCEICED, Government of Gujarat
Chief Electrical Inspector & Collector of Electricity Duty — online exemption applications, rates and forms.
Open websiteNotes. The copy of the Act is the PRS Legislative Research compilation with the Gujarat Electricity Duty (Amendment) Act, 2020 appended; check the Gazette for the authoritative text. The 50% expansion test, the 125 kVA DG set limit and the 90-day filing window reflect CEICED’s current practice as we apply it in filings; the furnace concession is granted by sanction order under Section 3(3). The SEZ period is under the Gujarat Special Economic Zone Act, 2004. Worked examples use round figures.
We have filed electricity duty exemptions for new units, expansions and captive plants across Gujarat since the early 2000s. We work out what your connection, machinery and DG sets qualify for, and handle the application until the certificate reaches your DISCOM.
- Eligibility check, including the 50% plant & machinery test
- CEICED filing within the 90-day window, DG sets included
- Follow-up until the certificate and the refund of duty already billed
- Planning with your VGIP 2026 subsidies — the exemption sits outside their ceiling
Starting production soon? File on day one.
Send us your connection type, investment and production date. We confirm what the exemption is worth and file it with CEICED inside the window — DG sets included.