GMR Pochanpalli Expreessways Limited Vs Additional Director (Supreme Court of India)
The dispute arose from a GST show cause notice issued to a concessionaire engaged in a Build-Operate-Transfer (BOT) annuity highway project. The notice sought GST, interest, and penalty on annuity amounts received between September 2017 and September 2022. The petitioner challenged both the show cause notice and Circular No. 150/06/2021-GST dated 17.06.2021, contending that annuity payments received under the BOT model were exempt from GST under Entry 23A of Notification No. 12/2017 and that the circular was contrary to GST exemption notifications and GST Council recommendations.
Read Telangana HC Judgment in this case: GST Show Cause Notice Upheld as Taxability of Annuity Requires Factual Determination
The petitioner argued that the highway project had been completed in 2009, prior to the introduction of GST, and that the annuity payments were linked to providing access to the road, similar to toll collections. According to the petitioner, the 22nd GST Council had recommended treating annuity payments on par with tolls, leading to the insertion of Entries 23A and 24A exempting services by way of access to a road or bridge on payment of annuity. The petitioner also relied on a Karnataka High Court decision that had quashed the impugned circular.
