The Ministry of New & Renewable Energy (MNRE) has issued Circular vide F. No. 283/3/2018-GRID SOLAR-PART(4) dated September 27, 2022 clarified that the increase in rate of GST on renewable energy devices from 5% to 12% w.e.f October 1, 2021 and imposition of Basic Customs Duty (“BCD”) on cells at 25% and modules at 40% w.e.f. April 1, 2022 would be treated as Change in Law.
With effect from April 1, 2022, a Basic Customs Duty (BCD) @ 25% has been imposed on import of solar PV cells (HS Code: 85414200) and a Basic Customs Duty @ 40% has been imposed on import of solar PV modules (HS Code: 85414300).
Further, as per Notification No. 8/2021 dated September 30, 2021, the GST rate for specified renewable energy devices and parts for their manufacture have increased from 5% to 12%.
The Renewable Energy (RE) Developers have represented to MNRE for treating the above two events as ‘Change-in-Law’.
The matter has been examined in MNRE and MNRE’s Renewable Energy Implementing Agencies (SECI/ NTPC Ltd./ NHPC Ltd.) are hereby requested that:
a) BCD imposition as Change-in-Law: W.r.t. 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 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 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.
b) Hike in GST rate as Change-in-Law: W.r.t. RE power projects, wherein the last date of bid submission was on or before September 30, 2021, i.e. on or before Top of Form the issuance of notification regarding 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 Circular can be accessed at: https://mnre.gov.in/img/documents/uploads/file_f-1664268571796.pdf
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