Taxability of the service of access to a road or bridge in the period November 08, 2016 to December 01, 2016

May 22, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Indirect Taxes and Customs (CBIC) on May 21, 2019, has given clarification regarding taxability of the service of access to a road or bridge in the period from November 08, 2016 to December 01, 2016.

However, Construction Federation of India had made representations wherein they have stated that due to the demonetization of Rs. 500 and Rs. 1000 notes with effect from November 08, 2016, The Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI) issued directions to the concessionaires operating tolls, to allow free access to users upto December 01, 2016 and that the toll charges for this period would be paid by the project authority (NHAI).

Certain authorities have commenced investigations that service tax is payable in this period on the ground that it is “declared service”. The matter has been examined and the correct legal position in this regard is as follows:

“Service by way of access to a road or bridge on payment of toll charges” is included in the Negative list. That means that no service tax can be levied on this service. The service that is provided by toll operators before November 08, 2016, during the period November 08, 2016 to December 01, 2016 and after December 01, 2016 is that of access to a road or bridge. When the service remained the same throughout and it continued to be in the Negative List, there can be no legal reason to treat it differently for the period November 08, 2016 to December 01, 2016.

A “declared service” cannot therefore, be assumed to have an overriding or omnibus character over other provisions. Thus, one cannot apply the concept of “declared service” to remove a service from the Negative List and make it taxable service.

The service that is provided by toll operators is that of access to a road or bridge, toll charges being merely a consideration for that service. On MoRTH or NHAI’s instructions, for the period November 08, 2016 to December 01, 2016 this service of access to a road or bridge was continued to be provided without collection of consideration from the actual user of service. Consideration came from a person other than the actual user of service, does not mean that the service has changed.      

[Circular 212/2/2019-Service tax]

Click here to download the Circular.


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