The Rajasthan Electricity Regulatory Commission (RERC) has ruled in favour of ReNew Hans Urja Private Limited, recognizing the 2021 increase in Goods and Services Tax (GST) on renewable energy equipment as a valid “Change in Law” event. The Commission has directed the concerned parties to assess the financial impact of the tax increase and compensate the solar power generator accordingly.
The order was issued on August 19, 2026, in Petition No. RERC/2349/2025 and IA No. 01/2025. The case was heard by a three-member bench comprising Chairman Dr. Rajesh Sharma, Member Hemant Kumar Jain, and Member Vijay Pal Singh.
ReNew Hans Urja had developed a 600 MW grid-connected solar power project in Pokhran, Jaisalmer, Rajasthan. The project was awarded by the Solar Energy Corporation of India (SECI) following its Request for Selection (RfS) issued on March 4, 2021, for 1,785 MW of solar capacity.
ReNew Hans Urja subsequently received Letters of Award (LoAs) for two 300 MW projects on February 15, 2022, at a tariff of ₹2.18 per kWh.
The Power Purchase Agreements (PPAs) were executed on April 18, 2022, with July 1, 2021, specified as the cut-off date. SECI subsequently entered into Power Sale Agreements with Rajasthan Urja Vikas & IT Services Limited (RUVITL) for supplying the power to Rajasthan distribution companies. The project was commissioned in two phases on July 28, 2024, and December 23, 2024.
The dispute arose after the Ministry of Finance increased GST on renewable energy devices and component parts from 5% to 12% through notifications issued on September 30, 2021. Since the tax increase occurred after the PPA cut-off date, ReNew Hans Urja claimed that the additional tax burden qualified as a Change in Law.
The developer issued a Change in Law notice to SECI on June 10, 2022 and approached RERC seeking recognition of the GST increase, a joint reconciliation of the financial impact, and carrying costs on the compensation.
SECI and RUVITL opposed the petition, citing delay, limitation, insufficient supporting documentation, and the absence of precise cost calculations. They also disputed the developer’s claim for carrying costs.
RERC determined that the GST increase qualified as a “Change in Law” event that affected the project’s costs. The Commission directed ReNew Hans Urja and SECI to jointly reconcile the additional expenses, with the costs supported by relevant invoices and statutory auditor certificates demonstrating their impact on the project.
RERC also directed SECI to recover the approved compensation from RUVITL on a back-to-back basis. The final compensation amount will be determined after the parties complete the reconciliation and verification of eligible additional costs resulting from the GST increase.
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