Facts: M/s Ankit Tandon Enterprises & Tollways Private Limited is engaged in wholesale business, bonded warehouse and leasing business. It wishes to enter in a contract with an entity who has been allotted Toll Collection work of certain road by NHAI. The said entity wishes to sublet the Toll Collection work to the Applicant.
Issue involved: Whether the exemption under Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017 (Sr. No. 23) (Heading No. 9967) [“Notification No. 12”] provided to “service by way of access to a road or a bridge on payment of toll charges” will apply to services provided by the Applicant on subcontract basis?
Held: The Hon’ble AAR of Madhya Pradesh vide Advance Ruling Order No. 09/2018 dated August 09, 2018 observed that 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. 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. It is exempted by Sr. No. 23 of Notification No. 12 and corresponding notification under MPGST Act, 2017.
But at the same time, the Hon’ble AAR also held that 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. Thus, 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.
Citation:  97 taxmann.com 324 (AAR-MADHYA PRADESH)