CERC Grants GST Change In Law Relief To Rising Sun Energy For Bhadla Solar Projects

In a recent order dated February 9, 2026, the Central Electricity Regulatory Commission (CERC) ruled on a petition filed by Rising Sun Energy Private Limited and its subsidiaries regarding compensation under the “Change in Law” provisions of their Power Purchase Agreements (PPAs). The case relates to the financial impact caused by the introduction of the Goods and Services Tax (GST) in 2017 on their solar power projects at Bhadla Solar Park in Rajasthan.

The petitioners developed 140 MW of solar capacity and argued that the implementation of GST increased their project costs. They sought a declaration that the new tax regime qualified as a Change in Law under their PPAs with NTPC, making them eligible for compensation. According to the petition, a large portion of their pre-commissioning claims, amounting to about ₹14.86 crore, had already been reconciled and paid. However, certain disputes remained unresolved. These included around ₹1.2 crore related to equipment costs and, more importantly, claims for recurring expenses incurred after the projects achieved Commercial Operation Date (COD).

NTPC and Rajasthan Urja Vikas Nigam Limited (RUVNL) opposed some of these claims. They argued that post-COD expenses, such as Operation and Maintenance (O&M) costs and annual land lease rent, were either outside the scope of the original petition or not legally settled. In response, the developers maintained that the GST imposed on O&M services and on mandatory agreements like the Implementation and Support Agreement (ISA) directly increased their operational costs and therefore fell within the scope of Change in Law.

While delivering its order, the CERC referred to a landmark judgment of the Appellate Tribunal for Electricity (APTEL) in the Parampujya Solar Energy case. The Commission observed that the term “relief” in the PPA should be interpreted broadly to preserve commercial balance and protect developers from unforeseen tax burdens. Based on this reasoning, CERC held that the petitioners are entitled to compensation for GST paid on O&M services, lease rentals paid to the solar park developer, and other recurring post-COD liabilities.

The Commission also allowed “carrying costs,” which means interest to compensate the developers for the time value of money. This interest will be calculated from the date the tax payments were made until the date of the order. CERC directed NTPC to pay the reconciled claims to the developers, with RUVNL required to reimburse NTPC. Importantly, the Commission clarified that NTPC’s payment to the developers should not be delayed or made dependent on reimbursement from RUVNL.

However, the order includes a key legal limitation. Due to an interim direction issued by the Supreme Court of India in related matters, the enforcement of post-COD compensation and carrying costs will remain on hold. Although the claims must be reconciled, final payment will depend on the outcome of pending appeals before the Supreme Court. The ruling affirms the developers’ right to tax-related relief while recognizing ongoing judicial proceedings at the highest level.