The CBIC has issued Notification No. 10/2026-Central Tax (Rate) dated 27 October 2026, issued under Section 148 of the CGST Act, 2017, notifies a special class of registered persons comprising concessionaires operating under a specified concession agreement, who provide operation and maintenance (O&M) services to the concessioning authority during the concession period.

Under the notified mechanism, such concessionaires shall pay GST on the amount charged or debited from the Escrow Account maintained in accordance with the concession agreement towards O&M expenses incurred by them. The tax shall be payable in the tax period in which the relevant expenditure is charged or debited from the Escrow Account.

Key highlights

1. Class of registered persons covered

The notification covers concessionaires under a concession agreement who supply O&M services to the concessioning authority during the concession period.

2. Basis for payment of GST

GST shall be payable on the amount of O&M expenditure charged or debited from the Escrow Account maintained under the concession agreement. The liability arises in the tax period in which such expenditure is charged or debited, rather than merely on the basis of the amount invoiced or received.

3. Scope of concession agreement

For the purposes of this notification, a “Concession Agreement” means an agreement entered into between a concessionaire and the concessioning authority under the Toll-Operate-Transfer (TOT) model, whereby:

• The concessionaire is granted exclusive rights to demand, collect and appropriate toll in respect of a road or highway;

• The concessionaire is required to operate and maintain the road or highway during the concession period; and

• The concessionaire is required to pay the concession fee upfront.