CERC to Address GST Impact on Power PPA Dues in Sept Hearing
The Central Electricity Regulatory Commission (CERC) has announced a public hearing to address the impact of GST rate changes on power purchase agreements (PPAs). The hearing, scheduled for September 22, 2025, aims to settle dues arising from these 'change in law' events. Meanwhile, the delivered price of G11 thermal coal is expected to drop to ₹2,895-2,905 per tonne from the current ₹3,140-3,150 per tonne.
The GST rate on coal procurement has increased from 5% to 18%, and the compensation cess of ₹400 per tonne has been abolished. These changes have affected the cost of coal for Gencos, leading to a potential reduction in the cost of power generation for coal-based power producers by around 15 paise per unit. This reduction is expected to trickle down to Discoms, with a potential decrease in their supply costs by around 12 paise per unit.
The CERC has acknowledged these changes as 'change in law' events and has issued a suo motu order. It has directed parties to file their written submissions within 10 days from the date of the order. The regulator intends to issue uniform directions to Gencos, Discoms, and other affected parties for a consistent treatment of these events.
The public hearing will provide a platform for all parties to discuss the impact of these GST rate changes on their PPAs. The CERC will then determine the appropriate relief to be granted to Gencos or Discoms under their agreements. The hearing is a step towards ensuring fairness and consistency in the treatment of these 'change in law' events.
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