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April 2012

Leviability of Service Tax on toll fees — Circular No. 152/3/2012-ST, dated 22-2-2012.

By Tarun Ghia, Brijesh Cholera, Pratik Mehta, Chartered Accountants
Reading Time 1 mins
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Board has examined the representation received for leviability of service tax on toll fee paid by users and it is clarified that service tax is not leviable on toll paid by the users of roads including those roads constructed by Special Purpose Vehicle (SPV) created under an agreement between NHAI or State Authority, unless SPV engages an independent entity to collect toll from users on its behalf and part of toll is retained by that independent entity as commission or is compensated in any other manner.

It is also clarified that renting, leasing or licensing of vacant land by the NHAI or State Authority to a SPV for construction of road will not attract service tax.

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