In re Airport Authority of India (GST AAR Kerala)
In the case of Airport Authority of India (GST AAR Kerala), the Authority for Advance Rulings (AAR) addressed multiple GST implications concerning the Airport Authority of India (AAI) and its concession agreement with Adani Thiruvananthapuram International Airport Limited. The AAR ruled that the arrangement between AAI and Adani does not constitute a “transfer of business.” Instead, the agreement involves a supply of services, such as manpower and leasing, between the parties, thereby attracting GST under Section 7 of the CGST Act, 2017. The AAR clarified that “transfer as going concern” is not applicable in this context, and the exemption under Notification No. 12/2017-Central Tax does not apply, as it pertains only to transfers of a going concern. Consequently, GST applies to specific transactions, including concession fees and reimbursements of salaries. However, GST is not applicable on reimbursements of municipal taxes, property taxes, or water charges, provided these are distinct from the lease consideration. Additionally, AAI is required to make a reversal under Section 17(2) of the CGST Act if its purchases serve both taxable and exempt supplies. This ruling provides clarity on the tax treatment of services and fees within concession agreements under GST.
