What is section 99A, and is the old Rs. 3,000 to Rs. 10,000 fixed tax on shop electricity bills still charged?

In 2022 many shopkeepers saw a fixed monthly income tax of Rs. 3,000 or more on their electricity bills. The provision that set those amounts has since been removed from the Ordinance. Section 99A remains, but in a different form: it now hands the rates to a general order.

What does the law say?

Section 99A, headed “Special provisions relating to payment of tax through electricity connections”, is printed inside the section 99 entry of the Income Tax Ordinance amended to 30 June 2026. The current text was substituted by the Tax Laws (Amendment) Act, 2023, and is deemed to have been substituted from 1 July 2022.

• Section 99A(1): tax “shall be charged and collected from retailers other than Tier-I retailers” as defined in the Sales Tax Act, 1990, and from specified service providers, “on commercial electricity connections at the rates specified in the income tax general order issued in terms of sub-section (2)”.
• Section 99A(2): the Federal Government, or the Board with the approval of the Minister in-charge following approval of the Economic Coordination Committee of the Cabinet, may issue that general order. It may provide the scope, time, payment, recovery, penalty, default surcharge, adjustment or refund; collection on the bill amount or any basis of consumption, “in addition to or in lieu of” advance tax under section 235(1); record keeping, returns and assessment; the collection mechanism; inclusion or exemption of persons; and whether the tax is adjustable, final or minimum.
• Section 99A(3): section 235(1) continues to apply unless the general order specifically exempts the person.
• Section 99A(4): section 100BA and rule 1 of the Tenth Schedule do not apply to section 99A tax unless the general order specifically provides otherwise for a person or class.

What happened to the Rs. 3,000 to Rs. 10,000 table?

The fixed amounts came from clause (3) of Division IV of Part IV of the First Schedule. The consolidated Ordinance records the omitted clause in a footnote. It read:

Gross amount of monthly bill	Tax
Does not exceed Rs. 30,000	Rs. 3,000
Exceeds Rs. 30,000 but does not exceed Rs. 50,000	Rs. 5,000
Exceeds Rs. 50,000 but does not exceed Rs. 100,000	Rs. 10,000
Retailers and service providers as notified by the Board in the income tax general order	Up to Rs. 200,000

Section 3 of the Tax Laws (Amendment) Act, 2023 then provided that “in Division IV, clause (3) shall be omitted”. The footnote notes that the Tax Laws (Second Amendment) Ordinance, 2022 had omitted it earlier. The same Act omitted section 235(1A), which had collected the section 99A tax through the bill, with effect from 1 July 2022.

As amended to 30 June 2026, neither the Ordinance nor its First Schedule contains a fixed monthly amount for section 99A.

How does it work in practice?

Two charges on a shop’s bill need to be kept apart.

1. Section 235 tax. This continues on commercial bills at the Division IV rates (nil up to Rs. 500, 10% up to Rs. 20,000, then Rs. 1,950 plus 12% of the excess), unless a section 99A general order exempts the person.
2. Section 99A tax. This exists only to the extent a general order under section 99A(2) sets it. The order decides the rates, who is covered and whether the tax is adjustable, final or minimum.

No general order under section 99A is held in this corpus. This page therefore cannot say whether an order is currently in force, what amounts it sets, or which retailers it covers.

Worked example (illustrative scenario)

Sadia runs a tailoring and fabric shop in Hyderabad and is not a Tier-1 retailer. Her monthly commercial bill is Rs. 25,000, inclusive of sales tax and charges.

1. Would the 2022 table apply? No. The table was omitted, so the Rs. 3,000 row for bills up to Rs. 30,000 is no longer law.
2. Does section 235 still apply? Yes, unless a general order exempts her. Rs. 1,950 plus 12% of Rs. 5,000 (Rs. 600) = Rs. 2,550.
3. Is there section 99A tax as well? Only if a current general order sets one for her class. That order needs to be checked on its own.

What about sales tax on the same bill?

Section 3(9) of the Sales Tax Act, 1990 is a separate charge. It says tax shall be charged from retailers other than Tier-1 retailers through their monthly electricity bills at five percent where the bill does not exceed Rs. 20,000 and seven and a half percent where it exceeds that. That is sales tax, not income tax, and it is not affected by the omission of the income tax table.

Common mistakes

• Quoting the 2022 fixed amounts as current law. They were omitted from Division IV.
• Assuming section 99A replaces section 235. Section 99A(3) keeps section 235(1) running unless the order exempts the person.
• Assuming the non-filer increase applies. Section 99A(4) switches off section 100BA and rule 1 of the Tenth Schedule for 99A tax, unless the order says otherwise.
• Mixing up section 99A with the Ninth Schedule. The Ninth Schedule still printed in the Ordinance refers to an older section 99A for traders in tax years 2015 to 2018. That older section was replaced.

What to check in the official text

Read section 99A (printed within the section 99 entry) and section 235 of the Income Tax Ordinance as amended to 30 June 2026, and the footnote under Division IV of Part IV of the First Schedule recording the omitted clause (3). Section 3 of the Tax Laws (Amendment) Act, 2023 contains the substitution and omission. Any income tax general order issued under section 99A(2) is not held in this corpus and needs to be read on its own.