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Finance ministry announced the rise in GST on Renewable Energy Equipment ( Solar Modules & Inverters) from 5% to 12% and will be applicable from 1st oct 2021.
The rise in GST have immediate negative impact on the cash flow of all EPC players. However, when in comes to Rooftop Vendors empaneled under RTS Phase-2 of MNRE, the impact is huge in terms of cash flow as well as the loss due to the tender conditions, wherein the the project cost under subsidy scheme is all inclusive and there will no price escalation due to any variation in prices or taxes and duties.
The clause 9.16 (a) of the RRECL's ( Rajasthan Renewable Energy Corporation) Tender for Rooftop Power Generation Scheme - 2019-20 mentioned:-
No price escalation on account of any statutory increase in or fresh imposition of customs duty, excise duty, sales tax or duty liveable in respect of the systems authorised to be installed, shall be applicable.
Although the extra GST paid on Module & Inverter will be set off (and have impact on end user only) but the difference of around Rs. 2.5/Wp in case of RTS Phase-2 is loss to the empaneled vendor under the Solar subsidy Scheme. ( The calculation is based on the Rajasthan's Rooftop Power Generation Scheme).
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