A concessionaire under a Toll-Operate-Transfer concession agreement, who supplies operation and maintenance services to the concessioning authority during the concession period, shall pay central tax on such services on the amount charged or debited from the escrow account towards operation and maintenance expenses, in the tax period in which it is so charged or debited.

‘Concession Agreement’ and ‘concessioning authority’ are defined. The concessioning authority may be the Central Government, State Government, Union territory, local authority, Governmental Authority or Government Entity, and the concessionaire pays the concession fee upfront. The notification comes into force on 1 November 2026.