CERC Maintains GST Constitutes Change in Law

The matter was of additional tax burden on which was put on transmission licensees because of the introduction of GST compensation cess.

Central Electricity Regulatory Commission recently issued an order on a suo-moto proceeding regarding GST. The order says that the introduction of GST will constitute a change in law kind of event for the transmission service providers in the country.

The matter was of additional tax burden on which was put on transmission licensees because of the introduction of GST compensation cess.

The commission said that the proceedings were taken up to assess and determine the principles to be adopted for allowing Change in Law for projects whose cut-off date was on or before June 30, 2018.

The commission had directed the transmission provider to submit the rate at which they paid tax before and after in introduction of GST on July 1, 2017.

The CERC asserted, after a careful examination of the detail furnished, that due to varied nature of such taxes that have been abolished through the introduction of GST, it is not possible to ascertain the impact in a generic manner for all such providers.

The abolition of these taxes, duties, cess, after the introduction of GST are was a change in the law and the savings arising out of such events should be passed to the beneficiaries.

The commission also maintained that the introduction of GST brought in new or increased taxes because of which, the additional financial impact borne by the transmission provider will be settled between the beneficiaries.

The commission ordered that the additional financial burden on an account of GST will be reimbursed by the long-term customers according to the relevant provisions.