Archive · 5 Oct 2026
GST Council Weighs Tax Clarity to Accelerate Highway Asset Monetisation
The GST Council is expected to discuss tax rules for companies that operate existing highways.
These companies may pay NHAI for the right to collect tolls.
A proposal would clarify that these payments do not attract GST because tolls paid by road users are already exempt.
The clarification would cover payments made all at once or in instalments.
Another proposal would make GST on maintenance funds due when the money is used for maintenance, not just when it is set aside.
The Council may also clarify that two government-owned entities are not automatically related parties for GST valuation.
These changes are intended to reduce uncertainty in highway deals.
The Council is not considering a general GST exemption for public-sector highway companies.
The GST Council is set to consider proposals addressing tax uncertainty in highway asset monetisation deals.
One proposal would clarify that concession payments to the National Highways Authority of India (NHAI) do not attract GST, whether paid upfront or in instalments.
For maintenance funds held in escrow, GST would become payable when funds are drawn for maintenance expenditure.
Another proposal would clarify that government-owned entities are not related parties solely because they share government ownership.
The Council is not considering a blanket GST exemption for public-sector highway companies.
- Who
- The GST Council, NHAI and private highway concessionaires.
- What
- The Council is set to consider proposals clarifying GST treatment of concession payments, maintenance funds and transactions between government-owned entities.
- When
- At an upcoming GST Council meeting; no date is specified.
- Why
- To reduce tax uncertainty that could affect the valuation and structuring of long-term highway monetisation deals.
- Main programme
- Monetisation of completed and operational highways
- Models mentioned
- Toll-Operate-Transfer (TOT) and infrastructure investment trusts (InvITs)
- Concession payments
- A proposal would clarify that upfront or instalment payments for toll-collection rights do not attract GST.
- Maintenance funds
- GST would be payable when escrowed funds are drawn against maintenance expenditure.
- Government-owned entities
- Common government ownership alone would not make two entities related parties for GST valuation.
- NHAI-promoted trusts
- Raajmarg Infra Investment Trust (RIIT) and National Highways Infra Trust (NHIT)
- Blanket exemption
- The Council is not considering a blanket GST exemption for public-sector highway companies.