GST not relevant on switch of Jaipur worldwide airport enterprise to Adani group


Adani Group Chairman Gautam Adani. file. , Picture Credit score: PTI

The Authority for Advance Ruling has stated that the switch of Jaipur Worldwide Airport operations by the Airports Authority of India (AAI) to Adani Group is exempt from Items and Providers Tax (GST).

AAI had approached the Rajasthan-Bench of the Authority for Advance Rulings (AAR) whether or not the switch of enterprise to M/s Adani Jaipur Worldwide Airport Restricted was handled as provide as ‘going concern’ and whether or not GST can be relevant on the switch. will be imposed. properties.

Switch of enterprise, whether or not as an entire or an unbiased a part of a shifting entity, is handled as a service underneath the GST legislation and such provide is exempt from Items and Providers Tax.

The AAR, in its determination dated March 20, 2023, held that the enterprise association is a switch of going concern underneath the Concession Settlement entered into between the Applicant (AAI) and M/s Adani Jaipur Worldwide Airport dated January 16, 2021.

Adani Group took over the operation, administration and growth of Jaipur Worldwide Airport from AAI in October, 2021. The airport has been leased to the group by the Authorities of India for a interval of 50 years.

The Rajasthan bench of the AAR additionally famous that in 2021 and 2022, the Gujarat and Uttar Pradesh benches of the AAR had additionally dominated that the enterprise association between AAI and the Particular Goal Car (SPV) got here underneath switch of going concern.

Nevertheless, the bill issued by AAI for reimbursement of wage/workers value at M/s Adani Jaipur Worldwide Airport Restricted is a provide which falls underneath the purview of manpower service and therefore taxable underneath GST at 18%.

AMRG & Associates Senior Accomplice Rajat Mohan stated that the AAR has dominated that the consideration acquired by the Airport Authority of India from switch of the working enterprise of your entire airport operations is a tax impartial provide.

“This determination will likely be a robust motivator for every other related transfers by AAI elsewhere in India,” Mohan stated.

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