Validity of Circular No. 150/2021 under Challenge: Rajasthan HC stays GST Recovery on Highway Annuities [Read Order]
Rajasthan High Court stayed GST recovery on annuity payments and issued notice on the challenge to the validity of Circular No. 150/2021
![Validity of Circular No. 150/2021 under Challenge: Rajasthan HC stays GST Recovery on Highway Annuities [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/Validity-of-Circular-Challenge-Rajasthan-HC-GST-Recovery-Highway-Annuities-taxscan.jpg "Validity of Circular No. 150/2021 under Challenge: Rajasthan HC stays GST Recovery on Highway Annuities [Read Order]")
In a recent ruling, the Rajasthan High Court stayed the recovery of GST on annuity payments received under the hybrid annuity model for highway construction considering the challenge to the validity of Circular No. 150/06/2021-GST dated 17.06.2021. Reengus Sikar Expressway Limited, the petitioner, a company engaged in the construction of national highways, filed a writ petition...
In a recent ruling, the Rajasthan High Court stayed the recovery of GST on annuity payments received under the hybrid annuity model for highway construction considering the challenge to the validity of Circular No. 150/06/2021-GST dated 17.06.2021.
Reengus Sikar Expressway Limited, the petitioner, a company engaged in the construction of national highways, filed a writ petition challenging the inclusion of annuity payments under the radar of GST based on the Circular No. 150/06/2021-GST dated 17.06.2021.
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The petitioner’s counsel argued that annuity payments, which replaced toll charges under the new model, were initially treated as exempt and should continue to be exempt just like toll collections. The petitioner’s counsel submitted that the impugned circular deviated from the original understanding and framework adopted by the authorities post-GST implementation.
They also argued that treating annuity payments as taxable contradicted both the legislative intent and practical understanding within the infrastructure sector. The petitioner also challenged the consequential proceedings including a recovery order dated 09.01.2025, initiated based on the circular.
Counsel appearing for the central and state respondents accepted notices during the hearing and sought time to respond. The respondents did not challenge the petitioner’s position in detail at this preliminary stage but reserved the right to file an application under Article 226(3) of the Indian Constitution for vacating the interim relief.
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The Bench comprising Justice Dr. Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali observed that the issue required consideration. The court directed that no coercive steps shall be taken against the petitioner in relation to the GST recovery proceedings initiated under the order dated 09.01.2025. The matter has been listed for further hearing after eight weeks.
To Read the full text of the Order CLICK HERE
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