The Rajasthan High Court recently directed a special purpose vehicle, indulged in the construction of governmental projects under a Build-Operate-Transfer (BOT) agreement to pursue an appeal against the impugned goods and services tax (GST) orders, while directing the adjudicating authority to consider relevant audit reports and a government circular clarifying taxability on toll collection rights under the BOT model.
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CG Tollway Ltd., a special purpose vehicle (SPV) operating under a Build-Operate-Transfer (BOT) agreement, filed writ petitions challenging two GST orders dated August 5, 2024 and August 22, 2024 issued under the provisions of the Rajasthan Goods and Services Tax Act, 2017 (RGST Act), the Central Goods and Services Tax Act, 2017 (CGST Act), and the Integrated Goods and Services Tax Act, 2017 (IGST Act).
Appearing through Bharat Rai Chandani and Jitendra Mohan Choudhary, the Petitioner affirmed that they are ready to file appeal before the proper authority if the Respondents shall adjudicate the same considering Circular dated 17.06.2021 bearing No.150/06/2021-GST and the Audit Reports dated 19.06.2023 bearing No.09/DC-12/GST AUDIT/2022-23/No.339/40 and dated 28.06.2024 bearing No.DCCT(Audit)-1/2024-25 passed by the State of Gujarat and the State of Karnataka respectively.
The Petitioner referred to the above-mentioned Audit Reports to submit that they did not provide taxable construction services to the government but merely recovered costs through toll collection, which was exempt from GST.
Read More: No Depreciation allowed on Toll Roads developed on BOT basis as Tangible Assets: ITAT
For the Revenue Department, Additional Advocate General Mahaveer Bishnoi, Anirudh Singh Shekhawat and Deputy Solicitor General Uttam Singh Rajpurohit for Deputy Solicitor General Mukesh Rajpurohit assured that if an appeal is preferred by the Petitioner, the same shall be adjudicated in accordance with law while taking into consideration the above–referred circular, audit reports and all relevant laws.
A division bench of Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali disposed of the writ petitions, directing CG Tollway Ltd. to file an appeal within 15 days. It further instructed the revenue authorities to adjudicate the appeal within three months, considering the CBIC circular and audit reports.
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