GST under RCM is payable on PWD permission, road-cutting, reinstatement charges and ground rent paid by CGD operator{ AUTHORITY FOR ADVANCE RULING , GOA Indian Oil-Adani Gas (P.) Ltd., In re* [2026] 187 taxmann.com 1090 (AAR – GOA)}
Facts:
A City Gas Distribution (CGD) operator paid charges to the Public Works Department (PWD) and other Government authorities towards permission fees, road-cutting charges, reinstatement charges, and ground rent for laying gas pipelines on government land and roads. The applicant sought a ruling on whether GST was payable on these amounts under the RCM
Issue:
Whether permission fees, road-cutting charges, reinstatement charges, and ground rent paid to Government authorities for laying gas pipelines are liable to GST under the Reverse Charge Mechanism.
Held:
The Goa AAR held that these amounts are consideration for services supplied by Government authorities (grant of permission/right to use government land and restoration-related services) and are not statutory levies or taxes. Accordingly, the services are taxable under GST, and since they are supplied by the Government to a business entity, GST is payable by the CGD operator under the RCM.
