CERC Seeks Proof Of Savings From GST Cut On Renewable Gear

25 Nov 2025 CW Team

The Central Electricity Regulatory Commission (CERC) has directed renewable energy developers to submit detailed, audited records quantifying the savings they accrued after the government reduced GST on renewable energy equipment from 12 per cent to 5 per cent. The directive applies to all projects where bids were submitted before the tax cut but procurement or commissioning occurred after the revised rate was notified.

Under power-purchase agreements, tariff revisions may be sought when a change in law affects project costs. Since the GST cut reduces the cost of modules, inverters, balance-of-system components and other inputs, regulators now want developers to provide clear, item-wise evidence of the resulting savings. Companies have been instructed to furnish invoices, cost sheets and auditor-certified statements demonstrating how the lower GST rate translated into reduced capital expenditure.

The purpose of the exercise is to ensure that the financial benefit of the GST reduction is passed on to distribution companies, either through lower tariffs or refunds, depending on the terms of the power-purchase agreement. Officials stressed that the tax cut must not lead to undue gains for developers and should be reflected transparently in project economics.

Power-sector executives say the directive will increase compliance requirements, as firms must reconcile procurement records, contract values and commissioning timelines with the revised tax structure. Regulators, however, believe the added scrutiny is essential to prevent disputes and to ensure that the intent of the GST cut—reducing renewable energy costs—is fully realised for consumers.

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