According to the Kerala branch of the GST Authority for Advance Ruling (AAR), the concessionaire agreement between the AAI and Adani Thiruvananthapuram International Airport Ltd is subject to GST since it is a provision of services rather than a “transfer of business.” The Kerala AAR finding runs counter to the decisions made by the Uttar Pradesh AAR in the Chaudhary Charan Singh International Airport case in Lucknow and the Rajasthan and Gujarat Appellate Authority for Advance finding (AAAR) in the matter of the transfer of the airports in Jaipur and Ahmedabad. In its appeal to the AAR, the Airports Authority of India (AAI) stated that it has a 50-year concessionaire deal with Adani Thiruvananthapuram International Airport Ltd.
AAI’s request for clarification
In order to determine whether the deal entails a transfer of business and whether such a transfer would be regarded as “supply as going concern” and be free from GST, AAI requested rulings from the AAR. According to the AAR, the transaction cannot be regarded as a “transfer as going concern” because it does not amount to a “transfer of business” from the applicant to the concessionaire. Under Section 7 of the GST Act, the concessionaire is providing the applicant with services such as leasing, labor, and airport development, which together constitute a supply.
GST Applicability
The AAR stated that the “assets have not been transferred” and that GST is due on the sums paid as payment for leasing or supplying the assets to the concessionaire. This was in response to a question about whether GST is applicable when M/s AAI transfers existing assets, aeronautical and non-aeronautical assets, and capital work in progress to M/s Adani Thiruvananthapuram International Airport Ltd.
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