GST Rate on Forest Road Fees and Transit Permits Explained
Forest road maintenance fees are GST-exempt toll charges, while forest produce transit fees attract 18% GST.
- Ruling
- 01/2018-19 dated 20.04.2018
- Dated
- 20 Apr 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Forest division asked if GST applies to road and transit fees
- Marg Sudharan Shulk for road access is exempt as toll
- Abhivahan Shulk for forest produce transit pass attracts 18% GST
- Transit fees are treated as taxable regulatory services
In short
The Dehradun Forest Division collects two distinct fees from commercial transporters operating in forest areas. The first is Marg Sudharan Shulk, charged to vehicles for using and maintaining forest roads. The second is Abhivahan Shulk, charged based on the quantity and quality of forest produce transported under state transit rules. The department asked the Authority for Advance Ruling whether GST applies to either of these charges.
What has changed
How it worked before
Transporters and forest contractors were unclear whether state forest fees qualified as tax-exempt road tolls or taxable government services under GST.
What has changed
The authority ruled that Marg Sudharan Shulk is a toll fee for road access and is completely exempt from GST. However, Abhivahan Shulk is charged for issuing transit permits based on timber volume and quality, making it a taxable service under Service Code 9997. As a result, forest departments must collect 18% GST on transit permit fees.
Who this affects
Mining companies, timber merchants, and commercial transport contractors paying road usage or transit fees to forest authorities.
An example
A mining firm in Uttarakhand transports gravel through forest roads and pays two charges to the forest division: a fixed road maintenance fee and a transit pass fee calculated per ton of gravel. Based on this ruling, the forest division charges zero GST on the road maintenance fee because it is an exempt toll. However, the division adds 18% GST to the transit pass fee as a taxable service, which the mining firm can claim back as input tax credit if eligible.
What you should do
Check your invoices from the forest department to ensure GST is applied only to transit permit fees and not to basic road toll charges. Keep in mind that an advance ruling binds only the specific government department that applied for it. If your local tax office takes a different view on similar charges, consult a tax professional before altering your tax payments.
If you do nothing
If you assume transit fees are exempt toll charges and fail to pay GST on them, tax officers can demand the unpaid tax along with interest and penalties during an audit. Conversely, paying GST on exempt road tolls creates unnecessary tax costs that your local tax officer may disallow as input tax credit.
The terms explained
- Advance Ruling
- An official tax decision that clarifies how GST laws apply to a specific business transaction before any tax dispute arises.
- Input Tax Credit
- The GST a business pays on its purchases, which it can deduct from the GST it collects on its own sales.
- Service Code 9997
- A classification code under GST used to tax generic administrative and miscellaneous services at 18%.
The ruling in detail
Authority for Advance Ruling
Divisional Forest Officer, Dehradun
01/2018-19 dated 20.04.2018 · Uttarakhand
Questions before the authority
- Whether GST is leviable on 'Marg Sudharan Shulk' charged by Forest Division Dehradun from non-government, private and commercial vehicles engaged in mining work in lieu of use of forest road?
- Whether GST is leviable on 'Abhivahan Shulk' charged by Forest Division Dehradun in respect of forest produce carried out by a person?
Facts
The applicant, Divisional Forest Officer, Dehradun, charges 'Marg Sudharan Shulk' from private and commercial vehicles engaged in mining activities for using and maintaining forest roads. The applicant also collects 'Abhivahan Shulk' based on the quantum and quality of forest produce transported under the Uttarakhand Transit of Timber and Other Forest Produce Rules, 2012. An advance ruling was sought to clarify whether GST applies to these two specific charges.
Ruling
| Question | What the authority ruled |
|---|---|
| Marg Sudharan Shulk | Exempt from GST Treated as toll charges collected for access to a road |
| Abhivahan Shulk | Taxable @ 18% (Service Code 9997) Consideration received for services provided in relation to carrying forest produce |
The Authority held that **Marg Sudharan Shulk is exempt from GST** as it constitutes toll charges for access to a road. In contrast, **Abhivahan Shulk is subject to 18% GST** under Service Code 9997 ('other services') as consideration for services rendered in allowing the transit of forest produce.
Reasoning
Regarding 'Marg Sudharan Shulk', the authority observed that services by way of access to a road on payment of toll charges are exempt under GST, and this fee is collected purely for using and maintaining forest roads. For 'Abhivahan Shulk', the authority noted that charges are computed based on the quality and quantity of forest produce transported with a transit pass under local forest rules. Therefore, 'Abhivahan Shulk' is not a toll tax but consideration for services rendered under Section 2(102) of the CGST Act, 2017, falling under taxable 'other services' (Service Code 9997) in Chapter 99 of the GST Tariff.
Provisions relied on
- Section 97(1) of CGST Act, 2017
- Section 97(2)(e) of CGST Act, 2017
- Section 2(102) of CGST Act, 2017
- Chapter 99 of GST Tariff, 2017
- Service Code 9997
- Uttarakhand Transit of Timber and Other Forest Produce Rules, 2012
For the practitioner
This ruling establishes that statutory charges levied by government departments purely for **road access and maintenance qualify as exempt toll charges**. However, regulatory charges levied based on quantum and quality for issuing **transit permits for forest produce are taxable services @ 18% GST** under Service Code 9997.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/01-2018-19_dtd_20-04-18_uttrakhand.pdf
Legibility of the scan, as read: high.
Prepared 17-10-2026.
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