Supreme Court: Expecting a Minor to Respond to a Public Court Notice is ‘Perverse’  ||  SC: Order 23 Rule 1 CPC Applies to S. 11 Arbitration Act, Barring Fresh Arbiration After Abandonment  ||  SC: Later Sanction Requirement Won’t Invalidate Cognizance Taken When No Prior Bar Existed  ||  SC: Documents Not Admitted by an Employee in an Enquiry Must be Proved Through Witnesses  ||  Delhi HC: MHA Has Authority to Initiate Disciplinary Proceedings Against AGMUT IAS Officers  ||  MP HC: Financial Hardship or Mere Allegations of Lawyer’s Negligence Cannot Excuse Delayed Appeal  ||  Patna HC: Blanket Approach of Denying Public Employment to Individuals Named in an FIR is Unfair  ||  Kerala HC: Repeated Possession of Even Small Quantities of Narcotic Drugs Can Invoke KAAPA  ||  Calcutta HC: Employers May Deduct Penal Rent From Gratuity of Employees Refusing to Vacate Quarters  ||  Calcutta High Court: ECI Not Singling Out Bengal, More Transfers in Other Poll-Bound States    

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 2026 - All Rights Reserved