The Authority for Advance Ruling has stated that the transfer of Jaipur International Airport operations by the Airports Authority of India (AAI) to the Adani Group will not be subject to GST.
The AAI had asked the Rajasthan bench of the Authority for Advance Ruling (AAR) to clarify if transferring the business to Adani Group would be considered as a ‘going concern’ and whether GST would be applicable on the transfer of assets.
According to the GST law, the transfer of a business as a going concern, whether in its entirety or as an independent part, is regarded as a service.
In October 2021, the Adani Group acquired the responsibility for managing, developing, and operating the Jaipur International Airport from the Airport Authority of India (AAI). The Indian government had leased the airport to the group for a period of 50 years.
The Rajasthan, Gujarat, and Uttar Pradesh benches of the Authority for Advance Ruling had previously ruled that the business arrangements between the Airports Authority of India (AAI) and the Special Purpose Vehicle (SPV) are considered a transfer of a going concern under GST law.
The GST applies to the invoice for reimbursement of salary or staff costs at Adani Jaipur International Airport Ltd raised by the Airport Authority of India (AAI), as it is considered a supply falling under the category of manpower service and is therefore taxable at 18%. The meaning of the sentence has been translated to CEFR Level C1 English without changing its meaning.
According to Senior Partner Rajat Mohan of AMRG & Associates, the Authority for Advance Ruling (AAR) has ruled that the revenue received from the transfer of the entire airport operations business by the Airport Authority of India is a tax-neutral supply.
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