If you are a frequent traveler on highways, you must have been charged a toll fee at some point in time. But have you ever wondered whether the tolls have GST or not? In this article, we will explore this topic in detail.

Understanding GST

GST or Goods and Services Tax is a tax levied on the supply of goods and services in India. GST has replaced many indirect taxes, and it is a comprehensive tax structure that aims to simplify the taxation process. The GST is divided into four categories- CGST, SGST, IGST, and UTGST.

Are Tolls under GST?

Yes, tolls come under GST. In 2018, the government clarified that toll charges on highways are subject to GST. The GST rate on toll charges is 18%. This means that if you pay a toll fee of Rs. 100, Rs. 18 will be added as GST.

Why Tolls Come under GST?

As per the GST laws, any supply of goods or services that incurs a charge is subject to tax. Tolls are charged for the use of the road, which is a service provided by the government. Therefore, tolls come under the purview of GST.

Impact of GST on Tolls

The introduction of GST has resulted in an increase in toll charges. Earlier, toll charges were subject to many indirect taxes, which made the calculation process complicated. With GST, the calculation process has become more streamlined, but the tax rate has also increased. This has led to an increase in toll charges.

Exemption from GST on Tolls

There are a few exemptions from GST on tolls. If the toll is collected by a local authority, it is exempted from GST. Similarly, if the toll is collected for a specific purpose, it can be exempted from GST. For example, if the toll is collected for the construction of a bridge, it can be exempted from GST.

Conclusion

So, the answer to the question- do tolls have GST is a yes. Tolls come under GST, and the tax rate is 18%. The introduction of GST has made the calculation process more streamlined, but it has also led to an increase in toll charges.

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