Kerala AAR's Divergent GST Stance Sparks Debate

The Kerala AAR ruled that the concessionaire agreement between AAI and Adani Thiruvananthapuram International Airport Ltd is a service supply, not a business transfer, making it liable to GST. This contrasts with other states' rulings which exempt similar airport transfers from GST, highlighting inconsistencies in GST application across states.

The Kerala-bench of the GST Authority for Advance Ruling (AAR) has pronounced that the agreement between Airports Authority of India (AAI) and Adani Thiruvananthapuram International Airport Ltd is not a business transfer, but rather a supply of services, subject to GST.

This decision stands in opposition to rulings from Rajasthan, Gujarat, and Uttar Pradesh, where similar airport transfers were exempted from GST. The AAR highlighted that services provided by the concessionaire constitute a supply under the GST Act.

Experts, including AMRG & Associates' Senior Partner Rajat Mohan, point out that such regional discrepancies underline the need for more consistent nationwide GST guidelines to prevent businesses from facing varying tax liabilities on similar transactions.

(With inputs from agencies.)