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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteDrivers do not pay GST on a highway or bridge toll in India. Entry 23 of Notification No. 12/2017-Central Tax (Rate) exempts the service of access to a road or bridge when the consideration is paid as toll. The exemption applies to that access charge—not automatically to every fee, penalty, service or contract connected with a journey.
The same treatment is intended for an additional higher toll collected from a vehicle without a valid FASTag, according to the recommendation published after the 47th GST Council meeting in 2022. Road access paid by annuity is covered separately by entry 23A. A concessionaire’s payment to a highway authority is a different transaction and cannot be decided merely by looking at the driver’s toll exemption.
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The short answer: the road user does not pay GST on the toll
For the ordinary highway transaction, the driver pays a toll for access to a road or bridge. That service is exempt from GST under entry 23 of Notification No. 12/2017-Central Tax (Rate). In practical terms, the toll collected from the road user should not have GST added to it as a separate tax component.
The operative wording listed by the Central Board of Indirect Taxes and Customs (CBIC), under heading 9967, is: “Service by way of access to a road or a bridge on payment of toll charges.” The wording identifies both the service and the condition for the exemption: access to the road or bridge, with consideration paid as toll.
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This is a tax treatment of the toll service. It does not mean that every amount appearing on a toll-related receipt, FASTag statement or transport invoice is necessarily exempt. A separate amount must be examined according to what it is charged for.
What the GST exemption covers
Access to a road or bridge
The exempt service is the right of access to the road or bridge for which the road user pays a toll. The legal description is focused on access, rather than on the vehicle, the payment method or the identity of the operator collecting the money.
Accordingly, the rule applies whether the driver pays at a toll plaza or the amount is debited electronically through a FASTag. FASTag is a collection method; it does not change the underlying description of the charge as a toll for road access.
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The amount that is genuinely a toll for access falls within entry 23. A driver therefore is not liable to add GST to that toll amount, and the toll operator does not collect GST from the driver on that exempt service.
“Exempt” should not be confused with a claim that no public charges exist. Toll rates, road-user rules and other statutory amounts can still apply. The exemption answers the narrower question of whether GST is payable on the toll-for-access service.
What the entry does not automatically cover
Entry 23 is not a blanket exemption for every charge encountered during a trip. Its wording does not, by itself, classify unrelated services or contractual payments. For example, a charge described as a separate service, administrative amount or contractual consideration would need its own GST analysis.
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When checking a receipt or account statement, identify the charge first. If it is the toll paid for access to the road or bridge, entry 23 is the relevant exemption. If it is another amount, do not assume the toll exemption settles its treatment.
Who is responsible for GST on a highway toll?
The driver or vehicle owner
The road user is the person paying the toll, but is not required to pay GST on the exempt access service. The amount debited from the user’s payment instrument represents the toll under the exemption, rather than a toll plus a GST line item.
The toll operator or concessionaire collecting the toll
The operator collecting the road-user toll must apply the GST treatment specified for that service. Because the access service paid by toll is exempt under entry 23, the operator should not collect GST from the driver on that toll amount.
This does not turn every activity of an operator into an exempt activity. The exemption follows the described road-access service and consideration. Other supplies made by the same operator can have different treatment.
The highway authority
The existence of a government or highway authority does not alter the basic road-user answer. The relevant question remains whether the amount paid by the driver is consideration for access to a road or bridge by way of toll.
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Why the notification and CBIC guidance matter
Entry 23 appears in Notification No. 12/2017-Central Tax (Rate), which lists services exempt from central GST. CBIC’s rate listing places the entry under heading 9967 and reproduces the road-access wording.
CBIC Circular No. 150/06/2021-GST, dated 17 June 2021, explains that entry 23 exempts access to a road or bridge when paid by toll. The circular is useful because it describes the consideration-based distinction: toll is one form of payment for access, while annuity is addressed by a separate entry.
These sources support a national-level explanation of the stated exemption. They do not convert every payment connected with highway construction, operation or contracting into a toll, and they do not replace a review of a different fee or agreement.
Does GST apply when a FASTag is used?
No GST is payable on the toll merely because it is collected through FASTag. The electronic debit is still a payment of the road-access toll covered by entry 23.
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What the FASTag balance represents
A FASTag account or linked bank account is a payment channel. The debit may show a toll plaza, date and amount, but the payment method does not create a separate GST liability on the exempt toll service.
Keep the toll separate from other account entries
A FASTag statement can contain more than one type of entry. To determine GST treatment, match each amount to its description. The toll-for-access amount is the item addressed by entry 23; a different debit should not be relabelled as toll without evidence of what it pays for.
What if the vehicle has no valid FASTag?
The GST Council’s recommendation published after its 47th meeting in 2022 addresses additional higher toll charges collected from vehicles without a valid FASTag. It states that these amounts are essentially toll charges for access to roads or bridges and should receive the same GST treatment as tolls.
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On that basis, the higher amount imposed under the no-valid-FASTag rule is treated in the same way as the underlying toll for GST purposes: the road user does not pay GST on that toll charge. The recommendation is specifically about the additional higher toll collected in that circumstance; it is not a general ruling that every FASTag-related penalty or fee is exempt.
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When a FASTag does not work
A failed scan, blocked tag or other validity problem can result in the higher toll amount under the applicable road-user rules. The GST question still turns on the nature of the amount. Where the charge is the additional toll for access described in the Council recommendation, it receives the same GST treatment as the toll. If a receipt contains a separately described service fee, that separate item requires independent classification.
How to check a disputed debit
- Obtain the toll-plaza receipt or the detailed FASTag transaction record.
- Identify whether the amount is labelled as the normal toll, an additional higher toll for no valid FASTag, or another fee.
- For the normal toll or the additional toll described by the Council recommendation, check that no GST has been added as a separate tax line.
- If a separate amount is shown, ask the issuer or operator what service it represents before treating it as part of the exempt toll.
Toll, annuity and concession payments are not the same thing
1. Toll paid by a road user
This is the transaction most drivers mean when asking who pays GST on a highway toll. The driver pays for access to the road or bridge by way of toll. Entry 23 describes this service as exempt.
2. Annuity paid for road or bridge access
CBIC Circular No. 150/06/2021-GST explains that entry 23A covers road or bridge access when the consideration is paid by annuity. Entry 23A is therefore a separate exemption for a different form of consideration.
The existence of entry 23A does not change the driver’s toll answer. It shows that the GST rules distinguish the way consideration for access is structured: toll is addressed in entry 23, while annuity is addressed in entry 23A.
3. A concessionaire’s payment to a highway authority
A concessionaire may make a payment to the National Highways Authority of India (NHAI) under a Toll-Operate-Transfer arrangement or another agreement. GST Council minutes for the 54th meeting in 2024 discuss that concession payment separately from the exemption for access paid by toll.
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That contractual payment is not the same transaction as the toll collected from a driver. The driver’s exemption therefore does not, by itself, determine the GST treatment of the concessionaire’s payment to the authority. The agreement, parties, consideration and applicable provisions must be examined separately.
| Transaction | What is being paid for | Relevant treatment described by official sources |
|---|---|---|
| Road user’s toll | Access to a road or bridge on payment of toll charges | Exempt under entry 23 of Notification No. 12/2017-Central Tax (Rate) |
| Road or bridge access paid by annuity | Access consideration structured as an annuity | Covered separately by entry 23A, as explained in CBIC Circular No. 150/06/2021-GST |
| Concessionaire payment to NHAI or another authority | A contractual concession payment, including a Toll-Operate-Transfer arrangement | Distinct transaction; the driver’s toll exemption does not decide its GST treatment |
Worked examples for common toll questions
Example: ordinary FASTag toll
A car passes a toll plaza and ₹100 is debited from its linked account as the road-access toll. The amount is the toll charge described by entry 23. GST is not added to that toll for the driver.
Example: higher amount for no valid FASTag
A vehicle without a valid FASTag is charged an additional higher toll under the applicable rule. The 47th GST Council recommendation says such additional higher toll charges are essentially toll charges for access and should receive the same GST treatment as tolls. The additional toll therefore is not made taxable merely because it is higher.
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A statement shows a toll debit and another amount identified as a separate fee. Entry 23 answers the GST treatment of the toll-for-access service. It does not establish the treatment of the separately described amount; that item must be identified and analysed on its own terms.
Example: concession accounting
A company operating a highway makes a payment to NHAI under a concession arrangement. That payment is between the concessionaire and the authority, not the road user’s toll transaction. The GST result for the concession payment cannot be inferred solely from the driver-facing exemption.
How to read a toll receipt or invoice
- Start with the description: look for “toll,” “access,” “additional toll” or a distinct fee label.
- Check the party receiving payment: a toll-plaza operator, FASTag issuer and highway authority can appear in different roles.
- Separate collection method from supply: FASTag, cash or another payment channel does not by itself determine GST.
- Look for a separate GST line: the exempt toll should not carry GST as an added tax component.
- Preserve the detailed record: retain the plaza receipt and FASTag ledger if an amount is disputed.
If the receipt does not explain an extra amount, request a transaction breakdown rather than assuming that every debit is either exempt toll or taxable GST. The legal description of the supply is the key fact.
Limits of the highway-toll exemption
The exemption is precise. It covers “service by way of access to a road or a bridge on payment of toll charges.” It does not state that all transport-related charges are exempt, nor does it settle the GST treatment of every agreement used to finance, build, operate or transfer a highway.
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Bottom line for drivers
For access to an Indian road or bridge paid as a toll, GST is exempt under entry 23 of Notification No. 12/2017-Central Tax (Rate), so the driver does not pay GST on that toll. FASTag does not change the result, and the 2022 GST Council recommendation extends the same treatment to an additional higher toll for a vehicle without a valid FASTag. Annuity-funded access is covered separately by entry 23A. Any unrelated fee or concession payment must be treated as a separate GST question.
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