Chandigarh Proposes Hike in Municipal Electricity Cess to Strengthen Civic Revenues

In Chandigarh, the Municipal Corporation (MC) imposes a municipal cess on electricity consumption, which is a local tax added to electricity bills to fund civic services.

Current Status of Electricity Cess in Chandigarh

• Existing Rate: As of now, the electricity cess is 10 paise per unit, generating approximately ₹15-16 crore annually for the MC.
• Proposed Increase: In March 2025, the MC approved a proposal to increase the cess to 16 paise per unit, aligning it with Punjab's rate of 2% on electricity consumption. This hike is expected to boost annual revenue to ₹22-23 crore.
• Implementation Status: The proposal awaits final approval from the Union Territory (UT) administration.

Do you know that many states/cities impose a municipal cess on electricity, such as Punjab (16 paise per unit), Haryana (8 paise per unit), Mumbai (2% of electricity charges). These charges are collected by the power distribution boards/companies and remitted to municipalities. The revenue generated from this cess is used by municipalities to fund essential public services and infrastructure.