Toll-Operate-Transfer Concessionaires: GST Special Procedure on O&M Services From 1 November 2026
Notification 10/2026-CT (Rate): special procedure under section 148 for GST on O&M services by toll-operate-transfer concessionaires, based on escrow debits.
Key takeaways: toll operate transfer gst
- Toll operate transfer GST special procedure applies from 1 November 2026 (Notification No. 10/2026-Central Tax (Rate)).
- Tax on operation and maintenance services is paid on the amount charged or debited from the Escrow Account.
- Tax is payable in the tax period in which the expenditure is charged or debited.
Table of contents
Notification No. 10/2026-Central Tax (Rate), dated 27 October 2026 (G.S.R. 948(E)), prescribes a special procedure under section 148 of the CGST Act for paying tax on operation and maintenance (O&M) services supplied by concessionaires under the Toll-Operate-Transfer (TOT) model. It applies from 1 November 2026.
Who is covered?
Registered persons who are concessionaires under a concession agreement and supply O&M services to the concessioning authority during the concession period.
- Concession Agreement: an agreement between a concessionaire and the concessioning authority under the TOT model, under which the concessionaire gets exclusive rights to demand, collect and appropriate toll on a road or highway, operates and maintains it during the concession period, and pays the concession fee upfront.
- Concessioning authority: the Central Government, a State Government, a Union Territory, a local authority, or a governmental authority or government entity that enters into the Concession Agreement.
What does the special procedure say?
- The concessionaire pays central tax on the supply of O&M services on the amount charged or debited from the Escrow Account maintained under the concession agreement, for O&M expenses it incurs.
- The tax is payable in the tax period in which that expenditure is charged or debited to the Escrow Account.
- The notification does not set a tax rate; it prescribes how and when tax is to be paid.
What to keep in mind
- Match your GST output liability month by month with the debits to the Escrow Account for O&M expenditure.
- Check the escrow statements and the concession agreement, as the notification does not separately define “Escrow Account” or “operation and maintenance services”.
- Separately, the exemption for the grant of toll rights by government bodies applies from the same date.
Related: CGST Amendment Rules 2026. For GST compliance support, see our GST services.
What to do next about toll operate transfer gst
Review how toll operate transfer gst affects your business: note the effective date, check your records and software, brief your team and keep a copy of the official text on file. Where the position is unclear for your case, take professional advice before filing or changing your process.
Official sources for toll operate transfer gst
Always read the original text. You can find notifications, circulars and rules on the CBIC Tax Information Portal and file returns and applications on the GST Portal. This guide on toll operate transfer gst is a summary and is not a substitute for the official text.
Frequently asked questions
When must the concessionaire pay tax on O&M services?
In the tax period in which the O&M expenditure is charged or debited from the Escrow Account.
On what amount is tax paid?
On the amount charged or debited from the Escrow Account for O&M expenses incurred by the concessionaire.
From when does the procedure apply?
From 1 November 2026.
This article is for general information only and is not tax, legal or financial advice. It is based on the text of the notification or circular as published by CBIC. Rules, rates and criteria change, so confirm the latest position with the official source or a professional before acting.
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