CERC declares compensation for solar developers due to GST law change

The Central Electricity Regulatory Commission (CERC) has declared that solar developers are required to compensate for higher expenses incurred after the implementation of the Goods and Services Tax (GST). The compensation will be considered a ‘Change in Law’ event and would be applicable even if GST was implemented after the project’s commercial operation date. 

Furthermore, the Commission’s order permitted developers to be compensated for additional expenditure on operations and maintenance (O&M) activities even if these services were outsourced. The Commission also ordered the parties involved to integrate O&M-related compensation by demonstrating a one-to-one relationship between the projects and the invoices raised by the generators.

Additionally, the central regulator instructed the distribution companies (discoms) to pay the reconciled claims that the implementing agencies must pay the developers. The order also stated that the implementing agencies must clear the dues of developers without making it contingent on receiving funds from the discoms.