Circular No. 221/15/2024
This circular provides clarification on determining the time of supply for services relating to construction and maintenance of National Highway Projects under the Hybrid Annuity Model (HAM) executed by the National Highways Authority of India (NHAI).
It explains that HAM contracts are composite in nature—covering both construction and operation & maintenance (O&M)—and therefore constitute a continuous supply of services under Section 2(33) of the CGST Act. The time of supply, as per Section 13(2) read with Section 31(5), shall be the earlier of the date of invoice issuance or receipt of payment, provided the invoice is raised within the prescribed timeline or upon completion of an event as defined in the contract.
If the invoice is not issued within such period, the time of supply shall be the earlier of the date of provision of service (deemed to be the due date of payment as per the contract) or the date of receipt of payment.
Additionally, it clarifies that any interest component included in the annuity or installment paid by NHAI forms part of the taxable value as per Section 15(2)(d) of the CGST Act.
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