Tariff
In simplest terms, a tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact.
A tariff is a tax on imports or exports. Money collected under a tariff is called a duty or customs duty. Tariffs are used by governments to generate revenue or to protect domestic industries from competition.
Terms involved in tariff
Units Consumed :
- Units consumed specify the aggregate amounts of electricity utilized over the certain duration.
It is obtained from meter reading.
Connected load:
- Connected load is the total wattage of appliances which are being used on the sanctioned connection.
It has an effect on the fixed charges for a particular connection.
Fixed charges:
- It’s a fixed amount of charge included in monthly electricity bill which depends on the type of connection and connected the load.
Electricity tax :
- Some states put a tax on the transaction of electricity. This is often charged in the percentage of total amount of bill.
- Point to be noted that government receives this amount and not the utility.
Electricity duty :
- Some states apply duty on the supply of electricity which is often charged an additional cost per unit or may also be in percentage.
- Point to be noted that government receives this amount and not the utility.
Tariff structure:
- The rate at which consumption unit is charged at energy price is specified by tariff structure.
Fuel surcharge:
- Tariff structure is set up for a year or two, cost of generation changes every month.
- Fuel surcharge apprehends changing the cost of generation.
- It is applied per unit.
Electricity tariff