The Rajasthan Electricity Regulatory Commission (RERC) has ruled in favour of ReNew Hans Urja Private Limited, recognizing the increase in Goods and Services Tax (GST) rates on renewable energy equipment in 2021 as a valid “Change in Law” event. The Commission has directed the parties to determine the resulting financial impact and provide compensation to the solar power generator.
The order was issued on August 19, 2026, in Petition No. RERC/2349/2025 and IA No. 01/2025. The matter 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 an RfS issued on March 4, 2021, for 1,785 MW of solar capacity. ReNew Hans Urja received Letters of Award for two 300 MW units 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, however, accepted that the GST increase constituted a Change in Law affecting the project’s costs. The Commission directed ReNew Hans Urja and SECI to undertake a joint reconciliation of the additional expenses, supported by invoices and statutory auditor certificates establishing the project-specific impact.
The Commission further directed SECI to recover the approved compensation from RUVITL on a back-to-back basis. The final compensation will therefore depend on the reconciliation and verification of eligible additional costs arising from the GST increase.
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