TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 1039
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....s of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1. M/S Ankit Tandon Enterprises & Tollways Private Limited (hereinafter referred to as the Applicant) is engaged in wholesale business, bonded warehouse and leasing business and registered with GSTN with GSTIN 23AAPCA7784F1ZC. 3.2. The Applicant wishes to enter in a contract with an entity. The entity has been allotted Toll Collection work of certain road by NHAI. The said entity wishes to sublet the Toll Collection work to the Applicant. 3.3. The Applicant cites Sr. No. 23 of Notification No. 12/2017-Central Tax (Rate) dated the 28th June, 2017 which reads as "Service by the way to access to a road or by a bridge on payment of toll charges" under heading 9967. 4. QUESTION RAISED BEFORE THE AUTHORITY - An entity has been allotted Toll Collection work of certain road by NHAI. The said entity 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(....
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....agreement between the NHAI and the contractor, the Central Governments' toll fee collection rights under the NHFR are transferred to the contractor in lieu of the contractor remitting an agreed sum to NHAI every week. Therefore, there is a possibility that the contractor may suffer a loss if the actual toll fee collected over the agreement period is less the amount paid by the contractor to NHAI. Thus, the risk pertaining to collection of toll charges vests with the contractor only. 6.8. In view of the above, it could be contended that the contractor and NHAI are acting on principal to principal basis and the contractor is not acting as an agent for the purpose of collecting the toll fee and, therefore, the contractor is not rendering any services to NHAI. In other words, a view could be taken that the contractor is carrying out the activity of toll collection on its own account only and not on behalf of NHAI. 6.9. It is 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, ....
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....8/06/2017, the Applicant company claims that the service provided by it are in the nature of Toll Collection services only and hence are exempt from GST under the said notification. 6. The services provided by the Applicant Company and by the Entity are clearly falling under the category of toll collection services and cannot be categorised as any other type of service merely because of sub-contact as all the terms of agreement between the NHAI and the Entity as well as the Entity and the Company are same and the company is only entering into the shoes of the Entity by agreeing to accept the toll collection work, hence not liable for GST. 7. Further, as the Applicant company is not entitled to collect GST from the end user due to its exempt nature, the same cannot be levied on it being indirect tax. The Entity is also collecting toll charges indirectly through the Applicant Company; hence 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.....
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..... 7.4 In case where the exemption is based on the recipient of service, the exemption is at times not available to the sub-contractor since the principal contractor receiving supplies from the sub-contractor may not fulfil the qualification regarding recipient as per the exemption notification. In some 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. 7.5 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. 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 ....