DPJ BIDAR - CHINCHOLI Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners in both the writ petitions are concessionaires who have been entrusted with construction of road by respondent no.7-Karnataka Road Development Corporation Limited. As a consideration for construction and maintenance of the roads for the contract period, the petitioners are paid certain amounts termed as 'annuity' by respondent no.7. In certain contracts where construction and maintenance of the roads has been out sourced to private persons consideration is paid by permitting the concessionaires/contractors to collect tolls from the vehicles plying on the road.

(2.) 100% exemption under Goods and Services Tax (for short 'GST') was granted towards collection of toll charges by way of notification No.12/2017 dtd. 28/6/2017 issued by respondent no.1. The toll charges as already stated above consisted of the entire consideration towards construction, operation and maintenance of the road. In other words, it consisted of the charges collected towards construction as well as services provided by the concessionaires. Subsequently, it was proposed that annuity, which was being paid by the highway authorities as a consideration to the concessionaires instead of permitting them to collect toll charges be also exempted from GST. In this regard, the minutes of 22nd GST Council meeting held on 6/10/2017 reads as under:

(3.) In this regard, two notifications viz., notification no.32/2017 and notification no.33/2017 were issued on 13/10/2017 and the service by way of access to a road or a bridge on payment of annuity was also exempted. The relevant portions of the notifications read as under: