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TMI Blog2018 (9) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... ome cases, specific provision has been given in the Notifications itself to take into its fold, the supply by a sub-contractor. For example in Clause (ix) and (x) of Sl.No.3 in Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 makes provision for lower rate of GST for sub-contractor also - In case of providing access to a Road or Bridge on payment of Toll, the exemption is totally based on service of providing access to a road or a bridge on payment of toll charges. There is no restriction regarding the supplier or the recipient of the supply. In the instant case, therefore, even though the supply of the service to the user of the Toll Road is by the sub-contractor, GST is not payable on the amount of Toll Charges collected. In the transaction of collection of Toll Charges by the applicant as a sub-contractor, there are essentially two supplies being made; one to the user of the Toll Road, for which charges are paid by the user of the Road and the other by the applicant to Highway Infrastructure (P) Limited - the ruling has no bearing on the consideration received by the applicant from of Highway Infrastructure (P) Limited for the supplies made by the applicant to H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wishes to sublet the Toll Collection work to the company. Now, as the Service by the way to access to a road or by a bridge on payment of toll charges is exempted service as per Notification No. 12/2017-Central Tax(Rate) dated the 28th June, 2017 (Sr. No.23)(Heading No. 9967). Whether the same exemption will apply to services provided by the Applicant, i.e. Service by the way of access to a road or a bridge on payment of access to a road or a bridge on payment of toll charges on subcontract basis. 5. DEPARTMENT'S VIEW POINT- The concerned officer submitted that services providing access to a Road or Bridge on payment of toll charge as exempted by notification no. 12/2017 Central Tax(Rate) Dated 28-06-17 issued Under CGST Act and Notification no. FA-3-42/2017/1/V/53 Dated 30-06-2017 issued under MPGST Act, 2017. However the consideration to be received by the sub-contractor from the contractor will be taxable. 6. RECORD OF PERSONAL HEARING - Shree Ankit Tandon, Director along with CA Abhishek Jain Appeared for personal hearing on 29-06-18 and they reiterated the submission already made in the application and attached additional submission which goes as follow - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, pertinent to note that NHAI could have very well entered into the aforesaid arrangement only to ensure that NHAI receives an assured sum from the toll collection activity without any need to supervise the agent with respect to performance of duties, leakage of revenue etc. Thus, the contractor, in its own interest would ensure that the toll charges are being properly collected and remitted to NHAI. For the contractor, higher the amount of toll charges collected higher is its own revenue. 6.10. In the present case, the Applicant M/S Ankit Tandon Enterprises is a company registered on 07/07/2017 with the main object of providing services of construction of roads, bridges etc and collection of Toll on direct or subcontract basis. 6.11. The Applicant company is considering a proposal with another entity for allotment of toll collection work on sub contract basis as the main contract for toll collection has been allotted to the said entity by the Government on the same terms and conditions as main contractor. Now, as the Toll collection service is exempted from GST vide clause 23 of Notification No. 12/2017 dated 28/06/2017, the company claims that the service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it is also exempt from GST. 8. Therefore, it is clear that all the parties i.e. NHAI, Main Contractor and Sub-contractor are providing Toll Collection Service, whether directly or indirectly and are therefore entitled for exemption vide clause 23 of Notification No. 12/2017 dated 28/06/2017. 6.12 The proposed terms and condition for user fee collection contract between Highway Infrastructure Private Limited(First Party) and the applicant, M/S Ankit Tandon Enterprises and Tollways Private Limited(Second Party) arc as follows- Basic Terms Conditions of the Contract 1. Both party with their mutual understanding applied in a 4 years Toll Collection Contract of NHAI advertisement no. Bid/Package on NHAI/13013/CO/RFP/Long Term/Nagpur-Betul/2017 Dated 11-01-2018. APC ₹ 39,70,00,000/- (Thirty Nine Crore Seventy Lac Only). 2. For the above said work we bid for ₹ 46,07,00,000/- (Forty Six Crore Seven Lac Only). 3. Second Party will make the payment of monthly remittance basis and this payment will change every year due to rate revision done by NHAI. 4. Security deposit for 1.5 months remittance basis and bank Guarantee of 3 months Remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplier or the recipient of the supply. In the instant case, therefore, even though the supply of the service to the user of the Toll Road is by the sub-contractor, GST is not payable on the amount of Toll Charges collected. 7.6 As discussed supra, in the transaction of collection of Toll Charges by the applicant as a sub-contractor, there are essentially two supplies being made; one to the user of the Toll Road, for which charges are paid by the user of the Road and the other by the applicant to Highway Infrastructure (P) Limited. 8. RULING (Under section 98 of the Madhya Pradesh Goods and Services Tax Act, 2017) 8.1 In case of providing access to a Road or Bridge on payment of toll charge, the exemption is totally based on service of providing access to a road or a bridge on payment of toll charges. There is no restriction regarding the supplier or the recipient of the supply. In the instant case, therefore, even though the supply of the service to the user of the Toll Road is by the sub-contractor, GST is not payable on the amount of Toll Charges collected. It is exempted by Sr. No. 23 of Notification No. 12/2017-Central Tax(Rate) dated the 28th June, 2017 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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