Annuity received by concessionaries towards construction of roads is exempt from GST

DPJ Bidar – Chincholi (Annuity) Road Project Private Limited Vs Union of India (Karnataka High Court)

Held that circular no. 150/06/2021-GST dated 17.06.2021 clarifying that GST exemption is not available to annuity (deferred payments) received by the concessionaries towards construction of roads is contrary to notification no. 32/2017 and notification no. 33/2017 dated 13.10.2017.

Facts-

The case of the petitioners is that the annuity (deferred payments) paid for construction of roads is exempt from GST as per notification nos. 32 and 33/2017 dated 13.10.2017 and the clarification issued by the GST Council in this regard in its meeting held on 28.05.2021 and the subsequent Circular dated 17.06.2021 (wherein it was clarified that entry 23A doesn’t exempt GST on the annuity paid for constructions of roads) issuing clarification regarding the same is contrary to the exemption notifications and are liable to be set aside.

Conclusion-

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