The Central Electricity Regulatory Commission (CERC) on Friday stated that recent changes in the Goods and Services Tax (GST) and the coal compensation cess structure are expected to reduce power tariffs, offering much-needed relief to both consumers and distribution companies (discoms).
CERC clarified that these statutory revisions qualify as a ‘change in law’ event, meaning their financial impact will be adjusted or refunded to power distribution companies in accordance with regulatory provisions.
The government recently abolished the ₹400 per tonne compensation cess on coal and raised the GST rate from 5% to 18%, resulting in a net cost adjustment for coal users. The extent of tariff reduction will depend on the grade of coal, with official estimates showing that grades G6 to G17 could see price reductions ranging from ₹13.40 to ₹329.61 per tonne.
Experts suggest the move could help ease input cost pressures on power producers, while lowering electricity bills for end consumers over time. The decision also aligns with the government’s broader push to make energy supply more affordable and efficient ahead of peak winter demand.
