Azure Power withdraws 300MW Petition Against NTPC For Imposition Of GST

Central Electricity Regulatory Commission recently issued an order in concern with   the Power Purchase Agreement inter alia seeking declaratory and compensatory reliefs on account of a ‘Change in Law’ viz. the issuance of Notification Nos. 24 and 27 of 2018- Central Tax (Rate) and 25 and 28 of 2018 Integrated Tax (Rate) dated 31.12.2018 by the Ministry of Finance, Government of India, inter alia effectively amending the Goods and Services Tax rates applicable on setting up of solar power projects, resulting in additional non-recurring expenditure in the form of an additional tax burden applicable with effect from 1.1.2019. 

Azure Power India Private Limited had filed a petition against NTPC Limited seeking declaration that imposition of GST is Change in Law event under Article 12 of the PPA dated 22.4.2019 entered into with NTPC for sale of 300 MW to NTPC for onwards sale to the Bihar Discoms on back-to-back basis.

During the hearing, Azure Power submitted that subsequent to filing of the Petition, the Respondent, NTPC has terminated the PPA due to non-fulfillment of conditions subsequent by the Discoms. Accordingly, Azure sought permission to withdraw the Petition.

CERC permitted Azure to withdraw the Petition.

Recently, The Central Electricity Regulatory Commission (CERC) issued an order regarding approval of Annuity model in terms of Central Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2017 for recovering Safeguard Duty Claim on account of Change in Law from M.P. Power Management Company Limited and Delhi Metro Rail Corporation.