The Central Electricity Regulatory Commission (CERC) has released a suo motu order regarding the slashed goods and service (GST) tax on renewable energy equipment from 12 per cent to 5 per cent. The change in GST rates lowers the cost of the projects and thus qualifies as a change in law. The order directs that, in accordance with anti-profiteering rules under Section 171 of the GST Act, the benefits of rate cuts must be transferred to distribution companies (discoms) and consumers.
Furthermore, the order states that the slashed rate will be applicable to projects where the bid submission date precedes September 22, 2025. The revised rate is also applicable where invoices or payments related to procurement, commissioning, commercial operations, or supplies are dated on or after September 22, 2025. This applies regardless of whether the payments are made in full or partially.
The statutory body further directed renewable energy developers and discoms to first reconcile the effects of the GST rate reduction at their respective levels before approaching the commission for approval under the change in law provisions, in line with the 2021 change in law recovery rules.
Earlier in September 2025, the GST Council decided to slash the GST on renewable energy devices and parts for their manufacture from 12 per cent to 5 per cent.
