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Jul 27, 2021
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GST on annuity received for construction of roads – A never ending chaos!
This indeed is the stance of the Government in resolving various grey issues left unanswered under GST. One such issue is taxability of annuity received by the concessionaires from Government/NHAI in execution of road projects.
Before the deep dive, it is pertinent to understand where the problem persists. The execution of road projects for NHAI typically could be undertaken by contractors under following models:
Engineering Procurement & Commissioning (EPC) /Build and Transfer Model
Build, Operate & Transfer (BOT) – Toll Revenue/Annuity Model
Hybrid Annuity Model – which is a combination of EPC + Annuity Model
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