GST Applied to AAI-Adani Airport Deal
The Kerala Authority for Advance Ruling (AAR) has declared that GST will apply to the concession agreement between the Airports Authority of India (AAI) and Adani Group for Thiruvananthapuram Airport. Unlike similar agreements in other states, where these partnerships have been classified as "business transfers" and are therefore GST-exempt, the Kerala AAR ruled this contract as a "service transaction" subject to GST. This decision underscores the need for a uniform approach in GST applicability for public-private partnerships across India. It raises significant implications for the financial structuring of similar airport deals, potentially influencing both state tax policies and concession agreements across various sectors. The case highlights ongoing complexities in interpreting tax law under India’s GST framework and could lead to calls for clearer guidelines to prevent such discrepancies between states, ensuring consistency in taxation for concessionaires.
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