Service by way of access to a road or a bridge on payment of toll charges - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 8 Service by way of access to a road or a bridge on payment of toll charges Effective date: 1.7.2012 Scope of Negative Service Section 66D (h) Service by way of access to a road or a bridge on payment of toll charges. Whether toll charges are service In case of Commissioner of the European Communities v. Kingdom of the Netherlands (2013) 38 STT 400 , it was held that providing access to roads in return for payment amounts to carrying out of an economic activity by operator thereof. Since use of road depends on payment of toll, there is a direct and necessary link between service provided and financial consideration received. Therefore, providing access to roads on payment of a toll constitutes a supply of services for consideration . Clarification by the Board (Taxation Guide Guidance Note 4 Exemptions dated 20.06.2012) 4.8.1 Is access to national highways or state highways also covered in this entry? Yes. National highways or state highways are also roads and hence covered in this entry. 4.8.2 Are collection charges or service charges paid to any toll collecting agency also covered? No. The negative list entry only covers access to a road or a bridge on payment of toll charges. Services of toll collection on behalf of an agency authorized to levy toll are in the nature of services used for providing the negative list services. As per the principle laid down in sub section (1) of section 66F of the Act the reference to a service by nature or description in the Act will not include reference to a service used for providing such service.