Business

No GST On Transfer Of Jaipur International Airport Business To Adani Group; Here's What The CGST Act Says About Tax Exemptions

  • The exemption granted under 'Notification No. 12/2017' of the CGST Act, is not exclusive to Adani Group but is applicable to all qualifying entities engaged in similar transactions.
  • The advance ruling obtained by the parties involved in the Jaipur International Airport deal was merely a proactive measure to ensure compliance with the applicable tax laws and avoid any ambiguities.

Swarajya StaffApr 25, 2023, 05:57 PM | Updated Apr 27, 2023, 02:38 PM IST
Adani Group Chairman, Gautam Adani (Representative Image)

Adani Group Chairman, Gautam Adani (Representative Image)


The Authority for Advance Rulings, Rajasthan, has recently given a verdict that the transaction between the Adani Group and the Airport Authority of India (AAI) — concerning operations, management, and development of Jaipur International Airport — will be exempt from Goods and Service Tax (GST).

As soon as the news came out, the government is being targeted for “favouring” the Adani Group and various tweets are being shared on the topic by opposition parties.



At a broader level, these claims are baseless and false and far from truth. Some fake news reports have even claimed that Gujarat government has extended such freebies to the Adani Group and so on and so forth.

Here's an attempted dissection of the claims, and explanation of truth behind the advance ruling.

What is an Advance Ruling?

An advance ruling is a mechanism through which taxpayers can seek clarification on specific tax matters related to their business activities from the tax authorities before undertaking the transactions.

This proactive approach helps in reducing uncertainties and disputes associated with the interpretation of tax laws. Applicants prefer obtaining advance rulings for various reasons.

First, it provides legal certainty and clarifies the tax implications of proposed transactions, thus enabling better planning and compliance.

Second, it reduces the risk of potential litigation and penalties arising from incorrect tax treatments.

Furthermore, advance rulings foster a transparent and cooperative relationship between taxpayers and tax authorities, promoting voluntary compliance and minimizing disputes.

Overall, advance rulings serve as a valuable tool for taxpayers to ensure that their business transactions are in line with the applicable tax laws and regulations.

What is Notification No. 12/2017, issued under the Central Goods and Services Tax (CGST) Act, 2017?

Notification No. 12/2017, issued under the Central Goods and Services Tax (CGST) Act, 2017, provides a comprehensive list of goods and services that are exempt from the levy of CGST.

This notification plays a crucial role in defining the scope of tax exemptions under the GST regime in India, ensuring that certain essential goods and services remain affordable and accessible to the public.

Some of the notable exemptions include healthcare services, educational services, services provided by charitable organisations, and specific agricultural activities.

In addition to these, Notification No. 12/2017 also outlines exemptions for certain transactions, such as the transfer of a business as a going concern or a slump sale, where the sale is made for a lump sum consideration without assigning individual values to the assets and liabilities.

These exemptions are vital in promoting ease of doing business, reducing the tax burden on taxpayers, and streamlining the overall tax structure.

By clearly demarcating the exempted goods and services, Notification No. 12/2017 fosters transparency, predictability, and compliance under the Indian GST framework.

A slump sale refers to the transfer of a business unit or undertaking as a whole, including its assets and liabilities, for a lump sum consideration. The exemption provided in Notification No. 12/2017 for such transactions is meant to prevent double taxation of assets and liabilities involved in the transfer.

It is important to note that this exemption is subject to certain conditions. For instance, the transfer must be a going concern, which means that the business must continue to operate even after the transfer. Additionally, both the transferor and transferee must be registered under the GST Act.

What is the Adani and AAI Jaipur Airport Deal All About?

The Airport Authority of India (AAI) has been adopting the Public-Private Partnership (PPP) model to improve the management, operations, and development of various airports in the country.

This model has been utilised to enhance the quality of services, facilitate the modernisation of infrastructure, and bring in the required investments for airport development.


The process of handing over airport operations to private entities typically involves the following steps:

  • Identification of airports: AAI identifies airports that can be privatized, considering factors such as passenger traffic, growth potential, and the need for infrastructure development.

  • Inviting bids: AAI invites bids from private entities, which can be domestic or international companies with experience in airport management and operations.

  • Evaluation of bids: The bids submitted by private entities are evaluated based on several criteria, including technical expertise, financial capabilities, and proposed development plans.

  • Selection and awarding of contract: The winning bidder is selected based on the evaluation, and the contract for the management, operations, and development of the airport is awarded to the selected private entity.

  • Signing of the concession agreement: A concession agreement is signed between the AAI and the private entity, which outlines the rights and responsibilities of both parties, as well as the terms and conditions of the partnership.

  • Transfer of operations: The selected private entity takes over the airport's management, operations, and development as per the concession agreement. This involves the establishment of a Special Purpose Vehicle (SPV) that is responsible for executing the project.

  • Over the years, the AAI has successfully handed over the operations of several airports to private entities, including the Indira Gandhi International Airport in Delhi, Chhatrapati Shivaji International Airport in Mumbai, Kempegowda International Airport in Bengaluru, and Rajiv Gandhi International Airport in Hyderabad.

    These privatised airports have witnessed significant improvements in infrastructure, passenger amenities, and overall operational efficiency, serving as examples of the benefits of the PPP model in the Indian aviation sector.

    In the same way the AAI has allocated the Jaipur International Airport work to the Adani Group; who emerged with the best and winning bid.

    As explained earlier, it appears that the AAI and Adani Group, as a matter of good corporate governance must have applied to the Authority For Advance Rulings (AAR), to obtain a clarity to ensure there are no uncertainties.

    What is the Current AAR Ruling all about?

    The AAR has only interpreted the current exemption notification and applied the same to the deal between AAI and Adani Group and has only stated that there is no GST component in this deal owing to a specific exemption. Is this any new “revdi” being offered only to Adani Group?

    The answer is again a 'no'.

    Is this notification applicable to any and every businessman in this country? The answer is yes. Is this the first time this exemption is being utilised by some entity? Again, the answer is 'no'.

    In conclusion, the allegations and claims surrounding the GST exemption for the Adani Group in their deal with the Airport Authority of India are based on misinformation and a lack of understanding of the existing tax regulations.

    The exemption granted under Notification No. 12/2017 is not exclusive to Adani Group but is applicable to all qualifying entities engaged in similar transactions.

    The advance ruling obtained by the parties involved in the Jaipur International Airport deal was merely a proactive measure to ensure compliance with the applicable tax laws and avoid any ambiguities.

    It is crucial for the public to be well-informed about the facts and the context in which such rulings are made, rather than being swayed by baseless claims and fake news.

    Cooperation between public and private entities plays a vital role in driving the growth and development of the nation, and responsible reporting and discourse are essential for fostering a transparent and healthy business environment.

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