Time of supply on Annuity Payments under HAM Projects

Last updated: 28 June 2024

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This notification provides clarification on the 'time of supply' for services related to the construction and maintenance of National Highway Projects under the Hybrid Annuity Mode (HAM) model. It addresses situations where payments are received both during the construction phase and as deferred annuity payments over several years. The clarification aims to ensure consistent application of GST laws across all field formations.

F.No. CBIC-20001/4/2024-GST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

North Block, New Delhi
Dated the 26th June, 2024

To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on time of supply in respect of supply of services of construction of road and maintenance thereof of National Highway Projects of National Highways Authority of India (NHAI)in Hybrid Annuity Mode (HAM) model -reg.

Representations have been received from the trade and the field formations seeking clarification regarding the time of supply in respect of supply of services of construction of road and maintenance thereof of National Highway Projects in Hybrid Annuity Mode (HAM) model, where certain portion of Bid Project Cost is received during construction period and remaining payment is received through deferred payment (annuity) spread over years.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues as under:

For full notification please refer to the attachment.

FAQ :

The notification clarifies the time of supply for services concerning the construction and maintenance of National Highway Projects under the Hybrid Annuity Mode (HAM) model.

It addresses projects where a portion of the Bid Project Cost is received during construction, and the remainder is paid through deferred annuity payments spread over years.

The clarification is issued by the Central Board of Indirect Taxes and Customs (CBIC), Government of India, Ministry of Finance.

The purpose is to clarify the time of supply issue and ensure uniform implementation of GST provisions related to HAM projects.

This clarification is issued under the powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (CGST Act).