In re RDB Realty & Infrastructure Limited (AAR Gujarat)
The Authority for Advance Ruling (AAR), Gujarat, ruled on the transaction proposed by RDB Realty & Infrastructure Limited concerning the transfer of its rights in a specific real estate project. The AAR held that the transfer of the Surat-based redevelopment project, along with all its assets and liabilities, qualifies as a “transfer of a going concern” and is therefore exempt from the Goods and Services Tax (GST).
The Transaction and Core Issue
RDB Realty & Infrastructure Limited was awarded a tender by the Surat Municipal Corporation (SMC) for the redevelopment of the “Aanjana Tenements” Public Housing Scheme. The company was required to construct housing for existing occupants and additional affordable houses for the SMC. In return, the SMC leased a portion of the land, designated as Parcel C (measuring 10,667.52 Sq. Mts.), to the applicant for a 99-year term, with rights to develop and sell superstructures commercially—known as the “Free Sale Land.”
The applicant sought to transfer its rights over this Parcel C project component, along with all assets and liabilities pertaining to it, to M/s. Samprati Buildcon Pvt. Ltd. for a lumpsum consideration of ₹60 crore. The applicant classified this transaction as a “Slump Sale” and sought an advance ruling on three questions:
