Rajasthan HC Directs CG Tollway Ltd. to Appeal GST Orders

CG Tollway Ltd. Vs Union of India (Rajasthan High Court)

In the case CG Tollway Ltd. Vs Union of India, the Rajasthan High Court addressed writ petitions challenging orders issued under the GST framework. The petitioner, CG Tollway Ltd., contested the applicability of GST provisions on toll collection rights and related issues. The court noted that the petitioner had a remedy through an appeal and directed the firm to file one within 15 days, ensuring that it would be adjudicated expeditiously, ideally within three months.

The petitioner raised concerns about the GST authorities’ interpretation of toll collection rights, citing prior rulings and circulars. They relied on two audit reports from Gujarat and Karnataka, dated June 2023 and June 2024, respectively. These reports clarified that toll collection rights granted by the National Highways Authority of India (NHAI) under the Build-Operate-Transfer (BOT) model were exempt from GST. Additionally, the petitioner pointed to clarifications from the Central Board of Indirect Taxes and Customs (CBIC) that toll collection does not constitute a taxable supply under GST.

The Karnataka audit report further examined the treatment of Input Tax Credit (ITC). It observed that the petitioner reversed ITC related to construction services since the SPV rendered no services to NHAI. This position was supported by CBIC’s letter dated June 28, 2021. The Rajasthan High Court directed that these clarifications, along with the audit reports and relevant GST circulars, be taken into account during the appeal process.

The court acknowledged the state’s assurance that the appeal would be considered in accordance with the law. Both parties retain the right to present their arguments during the appeal. The court’s directive ensures procedural compliance and timely resolution of disputes under the GST regime.

The matter was argued by Ld. Counsel. Bharat Raichandani