Electricity Duty Exemption Scheme (Haryana MSME)

What is the Haryana Electricity Duty Exemption Scheme?

Electricity Duty Exemption is a state industrial incentive notified by the Industries and Commerce Department, Government of Haryana on 8 June 2021 under Chapter 14 of the Haryana Enterprises and Employment Policy, 2020. Electricity duty is a state levy added to every industrial power bill by UHBVN and DHBVN. The scheme removes that levy from an eligible unit's production load for a fixed number of years, so the saving shows up on every monthly bill rather than as a one-time grant.

According to the notification, the exemption is granted on the power load being used for production purposes only. Light load is specifically excluded. The length of the exemption is longest in the least industrialised blocks and in the state's eight thrust sectors, which is how Haryana steers new factories away from the already-crowded Gurugram and Faridabad belt.

For micro, small and medium enterprises the scheme is administered by the Directorate of MSME, Panchkula through the District MSME Centres. Large and mega projects are handled by the Directorate of Industries and Commerce.

How many years of electricity duty exemption does Haryana give?

Electronics System Design and Manufacturing (ESDM) units get 100% exemption for 7 years. Data centres and co-location facilities get 100% exemption for 20 years across the whole state. Ultra-mega projects and relocating clusters of at least 10 similar enterprises are handled as customised packages decided by the Haryana Enterprises Promotion Board.

Except for service enterprises, every slab above is a 100% exemption for the stated period. Service enterprises get 75% in 'C' and 'D' blocks and 50% in 'B' blocks, for 5 years.

Haryana's eight thrust sectors under HEEP 2020 are auto, auto components and light engineering; agro-based, food processing and allied industry; textiles and apparels; ESDM; defence and aerospace manufacturing; pharmaceutical and medical devices; chemical and petrochemical; and large-scale energy and data storage.

Who is eligible for Haryana electricity duty exemption?

Units that can claim:

• All new micro, small, medium, large and mega industrial units that went into commercial production on or after 1 January 2021.
• Existing units undertaking expansion or diversification with a separate power connection.
• Units that have filed an IEM or Udyam Registration Certificate together with the Haryana Udhyam Memorandum at any stage.
• Units holding CLU or NOC from the competent authority where that is required.
• Units actually in commercial production at the time of the application.

Units that cannot apply or are not eligible:

• Enterprises in commercial production before 1 January 2021, classed as existing enterprises under the policy.
• Units whose item of manufacture falls in the restrictive list notified by the Haryana government from time to time.
• Claims on light load rather than production load, which are outside the scheme entirely.
• Units that have not obtained a required CLU or NOC.
• Expansions that share the original power connection rather than taking a separate one.

Under the MSMED Act limits used by the notification, a micro enterprise has plant and machinery up to Rs 1 crore and turnover up to Rs 5 crore, a small enterprise up to Rs 10 crore and Rs 50 crore, and a medium enterprise up to Rs 50 crore and Rs 250 crore. A large project has plant and machinery above Rs 50 crore and turnover above Rs 250 crore.

What documents are required for electricity duty exemption?

The application form itself asks for the block name and its B, C or D category, the enterprise category, whether the product is in a thrust, essential or import substitution sector, the date of commercial production, the date of release of the electric connection, the connected load and the exemption period claimed.

How to apply for Haryana electricity duty exemption

1. Get the power connection released by UHBVN or DHBVN for your production load, and note the exact date of release. The 3-month application window runs from this date.
2. File your registrations. Complete Udyam Registration (or IEM for large and mega units) and file the Haryana Udhyam Memorandum on the state portal.
3. Get Annexure-II signed by the concerned SDO or XEN of your distribution company, certifying the connection release date and connected load, and get the Annexure-III certificate from your Chartered Accountant.
4. Swear the undertaking on non-judicial stamp paper of at least Rs 50 before a notary public or a First Class Magistrate.
5. Submit the Annexure-I application online on the web portal of the Industries and Commerce Department, addressed to the Director or Director General, Industries and Commerce or MSME. Scheme documents and the forms are published on the Access to Finance page of msme.haryana.gov.in.
6. Attend the inspection. The Joint Director or Deputy Director of the District MSME Centre or District Industries Centre scrutinises the file, inspects the unit and recommends approval or rejection.
7. Clear deficiencies within 10 days of the online intimation, which the department must send within 7 days.
8. Collect the exemption certificate and give a copy to your distribution company so the duty stops appearing on the bill.

Applicants who prefer an over-the-counter route can take the same papers to the District MSME Centre in their district, which will help complete the online filing. The decision itself is made on the departmental portal.

What happens if you apply late?

Delay beyond 3 months from the release of the connection can be condoned by the Joint Director or Deputy Director of the District Industries Centre or District MSME Centre, but the lost period is not restored. The notification's own worked example makes this clear: for a unit connected on 1 January 2021, the application is due by 31 March 2021. If the unit applies on 28 February 2021 the exemption runs the full 5, 7, 10, 12, 15 or 20 years from 1 January 2021. If it applies on 31 March 2022 instead, the exemption runs only from 1 April 2022, and the 15 months from 1 January 2021 to 31 March 2022 are permanently forfeited.

For a mid-sized unit paying lakhs of rupees of electricity duty a year, that is a very expensive filing delay, which is why the connection release date should be diarised on the day the meter is energised.

Why electricity duty exemption claims get rejected

• Application filed beyond 3 months without seeking condonation.
• Claim made on light load instead of production load.
• Annexure-II not signed by the SDO or XEN of the distribution company, so the release date and load are unverified.
• Product in the restrictive list notified by the state.
• HUM not filed even though the Udyam certificate exists.
• Commercial production date before 1 January 2021, making the unit an existing enterprise.
• Unit found not in production at the time of inspection.

Service delivery timelines and appeals

The notification publishes a service delivery timeline of 30 working days for the Letter of Approval, 7 days for the Letter of Sanction and 7 days for disbursement. Deficiencies must be intimated within 7 days and rectified in 10 days.

An appeal against the decision of the competent authority lies with the Director or Director General, Industries and Commerce or MSME within 30 days of the communication of the order. Since 1 December 2022, all appeals under Haryana's incentive schemes are received online only.

The scheme commenced on 1 January 2021 and was notified to run for five years. As on the fact-check date the Directorate of MSME has not published a successor notification, so any unit planning a claim in 2026 should confirm the current position with its District MSME Centre before assuming the exemption is available.

Help and grievance redressal

• Directorate of MSME, Haryana: 0172-2580710, Plot No. C-3, HSVP Complex, Sector 6, Panchkula 134109.
• District MSME Centre or District Industries Centre in your district, for scrutiny, inspection and certificate issue.
• Haryana public grievance portal: harsamadhan.gov.in.

Filing an electricity duty exemption claim is free. If a wrong claim is detected at any stage, the exemption is recovered with 12% compound interest and the unit is debarred from further state incentives and from public procurement.

How to check your application status

Electricity duty exemption is processed entirely through the District MSME Centre (or District Industries Centre for large and mega units) and the departmental web portal, so there is no separate tracking ID system publicised for applicants. Use these routes to find out where your claim stands.

1. Log in to the departmental portal. Since the Annexure-I application was filed online on msme.haryana.gov.in, the same login shows the current stage of the file: submitted, under scrutiny, inspection pending, or a Letter of Approval issued. Check the Access to Finance section of the portal for the exemption scheme entry.
2. Watch for the deficiency intimation. The department is required to flag any missing document or discrepancy within 7 days of submission. If you have not heard anything and the 30 working day approval timeline has passed, that itself is a sign to follow up rather than wait further.
3. Call or visit your District MSME Centre. For MSME units, the Joint Director or Deputy Director handling scrutiny and inspection at the District MSME Centre can tell you whether the file has been inspected and recommended, and whether it is awaiting the Letter of Sanction or disbursement stage.
4. Call the Directorate of MSME, Haryana at 0172-2580710 if the district office cannot resolve the query, or if the file appears stuck beyond the published timelines of 30 working days for the Letter of Approval and 7 days each for the Letter of Sanction and disbursement.
5. Confirm certificate delivery with your distribution company. Once the exemption certificate is issued, the applicant must hand a copy to UHBVN or DHBVN. Until that happens the duty keeps appearing on the electricity bill even if the certificate has already been sanctioned, so checking with the discom is part of confirming the claim is actually in effect.
6. Use the state grievance portal if there is no response. For unresolved delays beyond the notified service timelines, a grievance can be lodged on harsamadhan.gov.in, Haryana's public grievance redressal system.

There is no SMS or automated status-check number published for this specific scheme, so tracking a pending claim depends on directly following up with the District MSME Centre or the Directorate of MSME rather than an online tracker.