The Ministry of Power (MoP) has requested the Central Electricity Regulatory Commission (CERC) to expedite the process for the exercise of the safeguard duty pass through option. The pass through option had been made applicable for solar projects following the recent imposition of safeguard duty on solar cells and modules imported from China and Malaysia.
MoP has asked CERC to treat change of cost related to change in duties, taxes, cess, etc. as pass through if it is not mentioned in the power purchase agreement (PPA). In addition, CERC should determine the per unit impact of duty to be passed on. CERC would also be required to issue an order for pass through along with calculations regarding per unit impact, within 30 days of developers’ filing their petitions.
The solar power developers have been facing difficulties in exercising the pass-through option to avoid the safeguard duty on projects that were under development before the duty was issued. As per the developers, considerable time is being spent to obtain the necessary approvals. Reportedly, this process could take up to 1.5 years due to regulatory hassles, even through the mandate requires the request to be processed within 6 months.