Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CERC) 205

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
Netra Wind Private Limited – Appellant
Versus
Solar Energy Corporation of India Limited – Respondent
Petition No. 314/MP/2022

Advocates:
For the Appellants/Petitioners: Ms. Mazag Andrabi, Shri Syed Tajali, Shri Ravindra Shekhawat
For the Respondents: Shri Aditya Singh, Ms. Anushree Bardhan, Ms. Ritika Singh, Ms. Somya Sahni

GST increase from 5% to 12% on renewable devices post-bid is Change in Law under PPA Article 12, entitling annuity compensation at 9.12% over 15 years plus carrying cost, reconciled to commissioned capacity.

Headnote:(A) Electricity Act, 2003 - Section 79 - Power Purchase Agreement - Article 12 - Change in Law - Increase in GST rate from 5% to 12% on renewable energy devices and parts via Notification No. 8/2021-Central Tax (Rate) dated 30.09.2021 - Constitutes Change in Law event post bid submission date, entitling affected party to compensation for additional expenditure to restore financial position - Held, notification amends tax structure directly affecting project costs (Paras 21, 22).

(B) Change in Law - Compensation methodology - Annuity payment at 9.12% discount rate over 15 years from 60th day of order or claim submission, with late payment surcharge; reconciliation required via one-to-one correlation of invoices, auditor certificate, limited to commissioned capacity (Paras 24-30).

(C) Carrying cost - Admissible despite absence of explicit restitution clause in PPA, at lowest of actual interest rate, working capital rate per RE Tariff Regulations, or late payment surcharge rate, from payment date to order date; post-COD aspects subject to Supreme Court orders (Paras 31-39).

Facts of the case:
Petition filed seeking approval of GST rate increase as Change in Law and compensation of Rs. 964,496,267/- plus carrying cost for 300 MW wind project (reduced to 206.5 MW commissioned capacity). Contracts for supply of wind turbine generators and services executed pre-notification; multiple SCOD extensions due to delays, pandemics, cyclones.

Findings of Court:
2021 GST Notification declared Change in Law; compensation via reconciled annuity payments; carrying cost allowed with enforcement caveats.

Issues: (I) Whether GST rate increase qualifies as Change in Law and entitles compensation; (II) Methodology for compensation payment; (III) Entitlement to carrying cost (Para 13).

Ratio Decidendi: Change in Law includes tax rate amendments post-bid with direct project impact; compensation ensures no profit from relief, using normative rates; broad 'provide relief' interpretation mandates carrying cost for time value of money, subject to prudence and reconciliation (Paras 15-39).

Result: Petition allowed; parties directed to reconcile claims for commissioned capacity; annuity and carrying cost approved, non-enforceable for post-COD and carrying cost pending Supreme Court orders.

Table of Content
1. project background and gst change petition (Para 1 , 2 , 3 , 4 , 5)
2. procedural history and hearings (Para 6 , 7)
3. petitioner's change in law claim (Para 8)
4. respondents' gst composite supply arguments (Para 9 , 10)
5. petitioner's capacity reduction rejoinder (Para 11)
6. issues framed for adjudication (Para 12 , 13 , 14)
7. gst notification qualifies as change in law (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22)
8. 9.12% annuity over 15 years methodology (Para 23 , 24 , 25 , 26 , 27 , 28 , 29)
9. carrying cost eligible despite no restitution clause (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38)
10. summary findings and petition disposal (Para 39 , 40 , 41)

ORDER

The Petitioner, Netra Wind Private Limited, has set up a 300 MW Wind Project at the village Laxmipar Netra, Nakhatrana Taluka, Kutch District, in the State of Gujarat. The Ministry of Power issued ‘Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Wind Power Projects’ dated 08.12.2017, under Section 63 of the Electricity Act (Bidding Guidelines). In accordance with the bidding guidelines, SECI invited proposals for setting up ISTS-connected Wind Power Projects with an aggregate capacity of 1200 MW on a Build Own Operate (BOO) basis by way of Request for Selection No. SECI/C&P/WPD/1200MW/T5/RfS/062018 (RfS) dated 30.06.2018. On 29.08.2018, M/s Alfanar Company KSA (Alfanar), the Petitioner's Parent Company, submitted its bid, and an e-Reverse Auction was held on 25.09.2018. Alfanar emerged as a successful bidder for a quantum of 300 MW at a tariff of Rs. 2.77/kWh. On 24.10.2018, SECI issued a Letter of Award (LoA) bearing Reference No. SECI/C&PMIPD/T5/LOA/AC /P1/26697 to Alfanar for the development of a 300 MW ISTS-connected wind power project in the State of Gujarat. Alfanar formed a project company, M/s Netra Wind Private Limited (the Petitioner), in accordance with the provisions of the RfS for the development of a Wind Power Project, generation and sale of wind power. On 21.01.2019, SECI executed the Power Purchase Agreement (PPA) with the Petitioner for the procurement of 300 MW power from the Wind Project; and also executed a back-to-back Power Sale Agreement (PSA) with Haryana Power Purchase Centre for onward supply of power procured from the Wind Project. Under the PPA, the Scheduled Commercial Operation Date (SCoD) of the Wind Project was 22.07.2020. The Petitioner had also executed three contracts for supply and services. The details of the contracts are as under:

(i) On 28.06.2019, the Petitioner executed a Supply Contract with M/s Alfanar Power Private Limited for the supply of ninety-two (92) wind turbine generators (WTGs) of SG-122. The said Supply Contract was subsequently amended on 18.03.2021, 16.09.2021 and 10.03.2022.

(ii) On 28.06.2019, the Petitioner executed a Supply and Services Contract with M/s Alfanar Power Services Private Limited for the supply of BoP equipment and allied services of erection, installation and commissioning service in relation to ninety-two (92) WTGs of SG-122. The said Supply and Services Contract was subsequently amended on 18.03.2021, 16.09.2021 and 09.11.2021.

(iii) On 05.03.2021, the Petitioner executed a Supply Contract with M/s Alfanar Power Private Limited for the supply of twenty-two (22) WTGs of Senvion M- 120 and eighteen (18) WTGs of Senvion M-130. The said Supply Contract was subsequently amended on 31.03.2022.

The SCOD was subsequently extended by SECI from time to time, as under:

(i) From 22.07.2020 to 28.02.2021, on account of the delay in operationalisation of Long-Term Open Access, by letter dated 10.12.2019.

(ii) From 28.02.2021 to 28.07.2021, on account of disruptions caused by the Covid-19 pandemic, by letter dated 07.10.2020.

(iii) From 28.07.2021 to 28.02.2022, on account of changes in the land policy of the State of Gujarat, by letter dated 15.03.2021.

(iv) From 28.02.2022 to 19.08.2022, on account of the delay in the issuance of the requisite Dev

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2026 Supreme(Online)(CERC) 205

CENTRAL ELECTRICITY REGULATORY COMMISSIONJishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, MemberNetra Wind Private Limited – AppellantVersusSolar Energy Corporation of India Limited – RespondentPetition No. 314/MP/2022

GST increase from 5% to 12% on renewable devices post-bid is Change in Law under PPA Article 12, entitling annuity compensation at 9.12% over 15 years plus carrying cost, reconciled to commissioned capacity.

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
Netra Wind Private Limited – Appellant
Versus
Solar Energy Corporation of India Limited – Respondent
Petition No. 314/MP/2022