New Delhi,nov 10
The concessionaire agreement between the AAI and Adani Thiruvananthapuram International Airport Ltd is not a “transfer of business”, but supply of services and hence, is liable to GST, the Kerala-bench of the GST Authority for Advance Ruling (AAR) said.The Kerala AAR ruling is contrary to the rulings passed by the Rajasthan and Gujarat Appellate Authority for Advance Ruling (AAAR) in the case of transfer of Jaipur and Ahmedabad airports and Uttar Pradesh AAR in the case of Chaudhary Charan Singh International Airport in Lucknow. These authorities had exempted such transfers from goods and services tax (GST).The Airports Authority of India (AAI) in its application before the AAR said it has entered into a concessionaire agreement with Adani Thiruvananthapuram International Airport Ltd for the operation, management, and development of the airport for 50 years.The AAI sought rulings from the AAR on a set of queries, including whether the agreement involves transfer of business and whether such a transfer would be treated as ‘supply as going concern’ and be exempt from GST.The AAR ruled that it does not constitute “transfer of business” by the applicant to the concessionaire and the transaction cannot be treated as “transfer as going concern”.The concessionaire is supplying the service of developing the airport of the applicant who is providing manpower, leasing, etc, to the concessionaire and both constitute supply under Section 7 of the GST Act, the AAR said in a ruling passed on January 10.On whether GST is leviable on transfer of existing assets, aeronautical/non-aeronautical assets and capital work in progress by M/s AAI to M/s Adani Thirunvananthapuram International Airport Ltd, the AAR said that the “assets have not been transferred” and GST is payable on the amounts received as a consideration for leasing/ supply of the assets to the concessionaire.The bench also said GST will be levied on the annual concession fees charged by the applicant from the concessionaire. Also, 18 per cent GST will be leviable on the invoices raised by the applicant for reimbursement of salary/ staff cost of the concessionaire.
