GST Rate Hike: CERC Orders Compensation To Ayana, Adani & Ostro

Ayana, Adani, Ostro Get Compensation Due to GST Rate Hikes

The Central Electricity Regulatory Commission (CERC) in three different cases ordered compensation to three different companies. The central regulator passed the order while hearing the pleas of the three firms related to ‘change of law’ events. These companies included-Ayana Renewable Power One Pvt Ltd, Adani Hybrid Energy Jaisalmer Three Limited and Ostro Kannada Power Pvt Ltd. Tenders for all these projects were issued by the Solar Energy Corporation of India (SECI). 

Ayana and Ostro Kannada had petitioned to get compensation to due to the surge in Goods and Services Tax (GST) rates after submitting their bids for their solar projects. On the other hand Adani Renewable had moved the CERC seeking compensation for the surge in GST rates, imposition of Basic Customs Duty (BCD) and other charges against import of solar equipment and others. 

In all the three cases, the CERC accepted the petitions of the the three firms and approved these changes as “change of law” events and awarded compensations accordingly. Ostro Kannada has moved the plea relating to its 300 MW of wind project situated in the Tiruchirappalli district of Tamil Nadu. The company submitted its bid for the SECI project on February 5, 2019 and received its LOA on June 17, 2019. The Union Finance Ministry came out with a notification of September 30, 2021, increasing the GST rates for renewable products. The company asked the CERC to consider this as a ‘change of law’ event and award compensations accordingly. 

In the case of Adani Hybrid Energy, the firm was involved in the setting up of 1200 MW of ISTS-connected wind-solar hybrid project in Rajasthan. The company submitted its bid on May 14, 2019 and got the LOA on June 18, 2019. The Union government on July 29, 2020 imposed the Safeguard Duty. On February 2, 2021, another notification talked about BCD. The firm was also aggrieved by the order of the Supreme Court on the Great Indian Bustard (GIB) issue. The revision of GST rates in 2021 also added to the project cost, the firm alleged. The company asked the CERC to consider all these facts as ‘change of law’ event and award compensations accordingly. 

Ayana Renewable Power One Pvt ltd on the other hand had a 300 MW of solar project in the Bikaner district of Rajasthan. It got the project through a tender from SECI. The company also alleged that whole it submitted its bid on May 30, 2019, the 2021 notification of GST increased its cost and demanded compensation from CERC accordingly.

The CERC during its hearing and going into the merits of the cases awarded compensation to all these aggrieved parties in three different cases with some more conditions based on individual cases.