POWER

Pay GST, Safeguard Duty Compensation to Solar Developers in 60 Days: MNRE to SECI and NTPC

The Ministry of New and Renewable Energy (MNRE) has released a circular stating that Goods and Services Tax (GST) and Safeguard Duty (SGD) compensation to solar project developers should be paid within 60 days.

Mentioning the orders already passed by the Central Electricity Regulatory Commission (CERC) on the ‘Change in Law’ compensation for GST and SGD, the ministry added that there is now no need for the developers to approach the CERC for each case individually.

Since a majority of solar projects were already under development when the safeguard duty and GST were announced, they came under a clause called “Change in Law.” Change in law comes into play when there is a new law or a change in the tax structure or when a new tax is introduced.

Previously, MNRE had stated, “Change in the rates of any taxes as mentioned in clause 5.7.2 of “Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects,” includes a change in rates of taxes, duties, and cess.” Thus, the solar projects that were auctioned before the imposition of the safeguard duty are eligible to get compensated for increased project costs as a result of the duty.

The circular by MNRE is addressed to Solar Energy Corporation of India (SECI) and National Thermal Power Corporation (NTPC) warns that if the compensation is not made within two months, a late payment surcharge (LPS) may be imposed or the payment can be made on an annual basis spread throughout the power purchase agreement (PPA) tenure.

To protect domestic cell and module manufacturers, a 25% safeguard duty was announced on solar cell and module imports from China and Malaysia for the period between July 30, 2018, and July 29, 2019.

Source
mercom india
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