CBIC had received various representations from the industry requesting a clarification regarding the applicability of GST on annuities paid for construction of road where certain portion of consideration is received upfront while remaining payment is made through deferred payment (annuity) spread over years.
In the 43rd GST Council Meeting, the council had recommended that GST shall be payable on annuity payments received as deferred payment for construction of road. CBIC has clarified vide Circular No. 150/06/2021-GST dated 17th June 2021, that Entry 23A of notification No. 12/2017-CT(R) does not exempt GST on the annuity (deferred payments) paid for construction of roads & therefore GST shall be applicable on such deferred payments.