Question ID :
44988
GST on Right of way Expenses
Whether GST is leviable on compensation paid by an Electrical Contractor to landowners for use of their land as access road/right of way for installation of electricity transmission lines. Such amount is treated as Right of Way Expenses for execution of works contract service. Whether the same is compensation not liable to GST or consideration for granting right to use land liable under GST?
Posted by
Ninad Prataprao Shete
on
May 02, 2026
Filed Under
Indirect Taxes
GST applicability will depend upon the agreement made between the Electrical Contractor and the landowner. if such payment is in the nature of compensatory damages for disturbance, crop loss, or diminution of land rights, and not towards any commercial leasing/licensing arrangement, no GST is applicable. However, where the agreement specifically grants a right to use/access land for consideration, the department may treat the same as a taxable supply of service relating to licensing/easement rights in immovable property under Schedule II of the CGST Act.
Posted by
CA. SATISH CHAND GARG on
May 12, 2026