In the sprawling landscape of India’s road infrastructure, the Toll-Operate-Transfer (TOT) model has emerged as a crucial mechanism for maintaining and upgrading highways. This model involves private companies taking over the operation and maintenance of roads, with the government providing a concession for a set period. However, the recent introduction of a new tax regime has added a layer of complexity to this arrangement. On October 27, 2026, the Central Government of India issued Notification No. 10/2026-Integrated Tax (Rate), mandating that concessionaires must pay central tax on the amount debited from the escrow account for operation and maintenance expenses. This change will have significant implications for the management of road maintenance and the financial health of the concessionaires involved.
