GST will not be applicable on this deal of Adani group, matter related to Jaipur airport

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GST will not be applicable on this deal of Adani group, matter related to Jaipur airport

Adani Group Business is spread in many areas and it has become one of the largest business houses in the country. The group has significantly expanded its airport operation business (Adani Airport Operation Business) over the past few years. Jaipur International Airport is also included in the airports for which the group has got the operating rights. The Adani group has made a big profit on the deal related to this airport. Now he will not have to pay GST on this deal.

Airport regulator had sought opinion

The Advance Ruling Authority has given a fresh decision in this regard. AAR has said in the decision that GST is not applicable on the deal of Handing over the operation of Jaipur International Airport by Airport Authority of India to Adani Group. In fact, AAI had asked the Rajasthan-bench of AAR whether Goods and Services Tax (GST) would be applicable on handing over the business to Adani Jaipur International Airport Ltd. AAR has given its verdict in this regard.

AAR cleared the matter

AAI wanted to know whether the transaction can be treated as ‘supply as a going concern’ and whether the transfer of assets would attract GST. When an entire business is transferred and carried on independently in future, such transaction is treated as ‘Supply as a going concern’. GST is not applicable on such deals.

The deal was done two years ago

AAR has said in its decision dated March 20, 2023 that the agreement between the applicant i.e. AAI and Adani Jaipur International Airport on January 16, 2021 is ‘supply as a going concern’. It has become clear from the AAR’s decision that GST is not applicable on the deal to transfer the operations of Jaipur International Airport to Adani Group. Adani Jaipur International Airport is a special purpose vehicle company of Adani Group, which has been formed for the operation of Jaipur airport.

Transfer to Adani in 2021

Adani Group took over the operation, management and development of Jaipur International Airport from AAI in October 2021. The Government of India has given the operation of Jaipur airport on lease for 50 years to Adani Group.

Reference was made to these decisions

While giving the verdict, the Rajasthan bench of AAR referred to the old decisions of Gujarat and Uttar Pradesh benches of AAR. The Rajasthan bench of AAR said that both the benches had made it clear in their earlier decisions that the transfer transactions between Special Purpose Vehicle and AAI are covered under supply as a going concern.

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