The Ministry of New & Renewable Energy (MNRE) has issued a Circular vide F. No. 283/3/2018-GRID SOLAR-PART(4) dated 27.09.2022, stating that the increase in the rate of GST on renewable energy devices and the imposition of Basic Customs Duty (BCD) on cells and modules would be treated as changes in the law.
BCD at the rate of 25% has been imposed on imports of solar PV cells and BCD at the rate of 40% has been imposed on imports of solar PV modules with effect from April 1, 2022.
As per the notification dated September 30, 2021, the GST rate for specified renewable energy devices and parts for their manufacture has increased from 5% to 12%.
The Renewable Energy (RE) Developers have represented MNRE for treating the increase in the rate of GST on renewable energy devices and the imposition of BCD on cells and modules events as “Change-in-Law”.
The matter has been examined by MNRE and MNRE's Renewable Energy Implementing Agencies (SECI/NTPC Ltd./NHPC Ltd.).
“Solar PV/solar PV-wind hybrid power projects, wherein the last date of bid submission was on or before the announcement on March 9, 2021, regarding the imposition of Basic Customs Duty (BCD) on import of solar PV cells and modules with effect from April 1, 2022, and wherein the Scheduled Commissioning Date (SCD), including time extensions granted, if any, was on or after April 1, 2022, REIAS may consider the imposition of BCD on import of solar PV cells and modules with effect from April 1, 2022 under “Change-in-Law” unless the same is disallowed by specific provisions in the tender documents/contracts,” the MNRE requested.
“RE power projects, wherein the last date of bid submission was on or before September 30, 2021, i.e., on or before the issuance of notification regarding the increase in GST rate for specified renewable energy devices and parts for their manufacture from 5% to 12%, and wherein the scheduled commissioning date (SCD), including time extensions granted, if any, was on or after October 1, 2021, REIAS may consider this hike in GST rate from 5% to 12% under “Change-in-Law” unless the same is disallowed by specific provisions in the tender documents/contracts,” the MNRE said.
