NCLAT: IRP Has Authority to Take Possession of Assets Owned by Corporate Debtor  ||  NCLAT: NCLT Can Direct Forwarding a Copy of its Order to Relevant Statutory Authorities  ||  Delhi HC: Centre to Expedite Process of Accessibility Features in OTT platforms for PwDs  ||  Delhi HC: Once Worker Provides Testimony Under Oath ‘Burden of Proof’ Shifts on Employer  ||  SC: There Cannot be Discrimination in Matter of Payment of Pension to Retired Judges  ||  SC: India is Not a Dharamshala that Can Entertain Foreign Nationals from All Over  ||  SC: Can Quash Domestic Violence Act Complaints Under Section 482 of CrPC  ||  Supreme Court: Can’t Use Statement of One Accused against Another  ||  SC: Inclusion of Name in Draft NRC Cannot Annul Foreigners Tribunal’s Declaration as Non-Citizen  ||  Supreme Court: Minimum Practice of 3 Years Mandatory to Enter Judicial Service    

Taxability of the service of access to a road or bridge in the period 8-11-2016 to 1-12-2016- (Ministry of Finance ) (21 May 2019)

MANU/DSTX/0003/2019

Service Tax

I am directed to draw your attention to a representation from the Construction Federation of India wherein they have stated that due to the demonetisation of Rs. 500 and Rs. 1000 notes with effect from 8-11-2016, 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 1-12-2016 and that the toll charges for this period would be paid by the project authority (NHAI).

2. Certain authorities have commenced investigations that service tax is payable in this period on the ground that ii is a "declared service" under section 66E(e) of the Finance Act, 1994. The logic of the invest gating authorities apparently is that even though in terms of section 66D(h) of the Finance Act, 1994, "service by way of access to a road or a bridge on payment of toll charges" is in the Negative List of services and is not taxable, since the toll operator chose to forgo payment by the user and accepted payment by NHAI, it comes under the category of "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.".

3.0 The matter has been examined. The correct legal position in this regard is as follows:

3.1 "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 8-11-2016, during the period 8-11-2016 to 1-12-2016 and after 1-12-2016 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 8-11-2016 to 1-12-2016.

3.2 Section 66E of the Finance Act, 1994 has to be read along with the other provisions of that Act. 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 a taxable service.

3.3 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/NHAI" s instructions, for the period 8-11-2016 to 1-12-2016 this service of access to a road/bridge was continued to be provided without collection of consideration from the actual user of service. Consideration came from the project authority. The fact that for this period, for the same service, consideration came from a person other than the actual user of service, does not mean that the service has changed.

Tags : TAXABILITY   SERVICE   ACCESS TO A ROAD OR BRIDGE  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved