RERC Denies GST Relief To Solar Firm, Cites Lack of Proof

RERC Denies GST Relief To Solar Firm, Cites Lack of Proof

The Rajasthan Electricity Regulatory Commission (RERC) has dismissed a petition by Clean Solar Power (Bhainsada) Pvt. Ltd., seeking additional compensation for higher GST rates and carrying costs related to its 250 MW solar project in Rajasthan.

The order, dated April 28, 2025, follows a previous 2023 ruling that recognized a GST hike on solar components as a ‘Change in Law’ event. While the Commission had directed the parties to reconcile claims and permitted re-approach in case of dispute, the latest petition was filed seeking further clarification and compensation.

Claims for higher GST rejected

Clean Solar argued that post-October 2021 changes in GST classification raised the tax rate on some items from 5% to as high as 18–28%. However, the Commission rejected the claim, stating that the company failed to provide clear documentary evidence showing rate changes for each item affected.

The RERC also observed that the items listed—such as transformers, cables, and spares—are generic electrical goods and not exclusive to solar projects, further weakening the petitioner’s case.

Carrying cost plea also denied

On the claim for carrying costs, the Commission reiterated that any compensation must follow its previous directive—choosing the lowest rate among three benchmarks and supported by an Auditor’s Certificate. Clean Solar failed to submit the required comparisons and documentation, leading to denial of relief.

The Commission disposed of the petition, denying relief on both counts. It emphasized that compensation under Change in Law must be based on demonstrated losses and not construed as a windfall.