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2018 (9) TMI 1039 - AAR - GSTLevy of GST - sub-let of Toll Collection work of certain road by NHAI - N/N. 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? Held that:- Under the scheme of exemption under Goods & Services Tax Laws, some exemptions are based on activities, some exemptions are based on recipient of the service, some are based on provider of the service and some are based on a combination of the service (goods being supplied as well as the recipient / provider of service. 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 - 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 Highway Infrastructure (P) Limited. Ruling:- The Toll Charges collected by the applicant are not “Toll Charges” per se in the hands of the applicant, but held in fiduciary capacity by the applicant, for onward remittance to Highway Infrastructure (P) Limited. The Ruling does not in any way relate to the Toll Charges retained by the sub-contractor, in terms of its agreement with Highway Infrastructure (P) Limited.
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