Transfer Of Going Concern By AAI To Adani Jaipur Airport Does Not Attract GST: Rajasthan AAR

The Rajasthan Authority of Advance Ruling (AAR) has ruled that GST is not applicable on transfers of going concern by the Airport Authority of India (AAI) to Adani Jaipur Airport.

The bench of Umesh Kumar Garg and Mahesh Kumar Gowla has observed that the invoice raised by the applicant for reimbursement of the salary/staff cost on M/s. Adani Jaipur International Airport Limited is a consideration for a supply, which falls under the ambit of manpower service. 18% GST is applicable on salary or staff cost reimbursement.

AAR also stated that reimbursement for municipal taxes, property taxes, and water charges is exempt.

Adani Jaipur International Airport Ltd. was chosen after the applicant, the Airport Authority of India, called for bids to operate, manage, and develop some of AAI's airports in a public-private partnership.

The applicant sought an advance ruling on the issue of the transfer of business by the Airport Authority of India to M/s. Adani Jaipur International Airport Limited, which is treated as a supply.

The AAR held that consideration for services by way of transfer of a going concern may be as per the terms and conditions of the contract, and there is no restriction on the consideration being upfront, one-time, or in installments. Concession fees are payable by the SPV to AAI during the concession period, calculated on a formula based on passenger footfall. It is part of the consideration for the transfer of business assets.

Applicant’s Name: Airports Authority of India

Date: 20/03/2023

Click Here To Read The Ruling