Applicability of GST on toll charges

Applicability of GST on toll charges

The toll charge is reimbursement for the costs that are incurred in the construction, maintenance, and operation of roads and bridges. The collection of toll charges is not revenue from taxes in any sense for the Government. In India, most of the toll roads are owned by private investors so the collection goes to them and not the Government. FASTag provides information regarding the movement of vehicles when they cross the toll booths so tracking and tracing become possible. [Read – Impact of integration of FASTag  on the movement of goods under GST]

What are toll charges?

A toll charge is a consideration charged to vehicles for providing/allowing access to a road or bridge.

What are the higher toll charges?

A higher toll charge is additional/double consideration charged to vehicles not having valid functional FASTag for providing/allowing access to a road or bridge. [GST Circular 177/2022 dated 3^rd Aug 2022]

What are overloading charges?

Overloading charge is the consideration charged to overloaded vehicles which are permitted to ply on National Highways. Consideration is determined by multiplying toll charges with 2/4/6/8/10. [GST Circular 164/2021 dated 6^th Oct 2021]

Is GST applicable on toll charges?

NO. Collection of toll charges for allowing use/access to a road or bridge is classified under the exempt services notified vide CGST(Rate) Notification No. 12/2017 dated 28.06.2017 [Entry 23 – Heading 9967]

Is GST applicable on the collection of higher/double toll charges?

NO. Collection of higher toll charges whether double or more will be treated at par with toll charges i.e., exempt service. Essential service here remains the access to road or bridge just that vehicles are charged higher/double as they do not have valid functional FASTag.

Is GST applicable on the collection of overloading charges?

NO. Collection of overloading charges will be treated at par with toll charges i.e., exempt service. Essential service here remains the access/use of road or bridge just that vehicles are charged an additional fee for playing for a certain period.

Read: Inspection, detention and penal provisions of goods in transit

Read: How to check/track if duplicate e-way bills were generated?

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CA Ankita Khetan

Founder at Financepost.in

Chartered Accountant in practice, DipIFRS (from ACCA, UK), Post Graduate in Commerce, Certified Independent Director (from IICA), and holds a certification in Forex and Treasury Management course (by ICAI).

She can be contacted at info.financepost@gmail.com

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