CERC allows GST to be covered under change in law

The Central Electricity Regulatory Commission (CERC) has allowed the goods and services tax (GST) to be covered under the change of law clause of PPAs. The CERC order comes in response to separate petitions filed by Azure Power and Prayatna Developers Private Limited (a subsidiary of Adani Power). As per the order, the GST paid by project developers can be recovered as a separate element on a one-time basis in a time-bound manner. The CERC has given 60 days to all the respondents to pay both the petitioners their compensation amounting to the change in cost due to the payment of GST during the course of project construction. The order paves the way for other project developers to approach the CERC seeking a one-time compensation owing to the increase in costs due to the implementation of GST with effect from July 1, 2017.

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