• Notification Date: 25-04-2023
• Notification No: N/A

GST not applicable on Transfer of Jaipur Airport Business to Adani Group

The Authority for Advance Ruling (AAR) recently said that the transfer of Jaipur airport operations by the Airports Authority of India to the Adani Group was exempt from Goods and Services Tax (GST). The conglomerate had taken control of the airport in 2021.   

The AAI had approached the Rajasthan bench of the Authority for Advance Ruling (AAR) seeking ruling on whether the transfer of the airport business to Adani was treated as supply as going concern and whether GST was leviable on the transfer of assets. 

Transfer of business as a going concern, as a whole, or an independent part thereof, is considered a service under GST law and such supplies are exempt from goods and services tax. In its ruling dated March 20, 2023, the AAR said the business arrangement between the AAI and Adani Jaipur International Airport was a transfer of going concern. 

In October 2021, the Adani Group had taken over the operations and management of the Jaipur International Airport from the AAI. The airport has been leased out to the group by the central government for a period of 50 years. 

The Rajasthan bench of the AAR also noted that in 2021 and 2022, the Gujarat and Uttar Pradesh benches of AAR too had ruled that business arrangements between AAI and Special Purpose Vehicle (SPV) are covered under transfer of going concern. 

However, the invoice raised by AAI for reimbursement of salary/staff cost on Adani Jaipur International Airport Ltd is a supply that falls under the ambit of manpower service and hence taxable at 18 per cent under GST. 

AMRG & Associates Senior Partner Rajat Mohan said the AAR has ruled that considerations received from the transfer of running the business of whole airport operations by the Airport Authority of India are tax-neutral supply.  

"This ruling will have strong persuasive for any other similar transfers by AAI in other locations of India," Mohan told the news agency PTI.