Maharashtra regulator allows Adani Power to recover GST expenses

The Maharashtra Electricity Regulatory Commission (MERC) has allowed Adani Power to recover additional expenses incurred by its subsidiary Adani Power Maharashtra (APML) due to introduction of the goods and service tax (GST). The company put the total impact of the GST to be Rs 0.35 per unit, which amounts to about Rs 402.5 crore till February 2018. APML had filed a petition with the MERC in April to adjust tariffs of electricity sold to the state from its 3,300 MW Tiroda power plant. The company sought the electricity regulator’s approval to offset financial consequences of GST and evacuation facility charge by Coal India (CIL).

The GST came into effect from July 1, 2017, and CIL imposed a flat Rs 50 per tonne evacuation facility charge from December 20, 2017. The company had argued that both these additional charges came under the ‘change in law’ provision, which warrants compensation to restore the affected party “through monthly tariff payments to the same economic position as if such change in law had not occurred”. However, the MERC did not declare imposition of CIL’s evacuation facility charge as a change in law. APML estimated that this charge cost the company about Rs 11 crore.

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