# CBIC Circulars on TOS — HAM Model & Spectrum Usage Charges
Two important clarifications from CBIC on TOS for special cases:
## 1. TOS Under HAM (Hybrid Annuity Model) Contracts
HAM is a model used in National Highway construction where:
- Part of the contract value is paid during construction (40%);
- The remaining (60%) is paid as deferred annuities along with interest over the operations period.
TOS treatment: HAM contracts are treated as a continuous supply of service — TOS is the date of completion of the milestone event (each annuity is linked to an event). Interest component is treated as part of value of supply since it forms consideration for deferred payment.
## 2. TOS for Spectrum Usage Services & Similar Services (Natural Resource Allocation)
For allocation of natural resources (e.g., spectrum, mining rights) where the licence fee is payable in installments over a period:
TOS = Need-to-pay basis — i.e., TOS arises as and when payment is due under the contract, even if actual payment is delayed. Each installment is a separate TOS event.
## Why These Circulars Matter
These are special long-tenure arrangements where applying the standard 30-day-from-supply or payment trigger would be impractical. The Government has clarified milestone/installment-based TOS to align with commercial reality.