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2021 (9) TMI 1064 - AAR - GSTSupply or not - supply as going concern or not - transfer of business by the AAI to the M/s. Adani Ahmedabad International Airport Limited - covered in clause 4 of schedule II of CGST Act viz-a-viz GSGST or not - scope of Entry No. 2 of the exemption N/N. 12/2017 – Central Tax (Rate) dated 28-06-2017 issued u/s Section 11 of CGST Act 2017 - levy of GST on the transfer of Existing assets (RAB), Aeronautical Assets, non-aeronautical assets and Capital work in progress by AAI - transfer of asset be treated as services or not - concession fees paid by M/s. Adani Ahmedabad International Airport Limited to AAI be treated as consideration for transfer of business or not - levy of GST on Monthly/Annual concession fees charged by the AAI - levy of GST on invoice raised by AAI for reimbursement of the salary/ staff cost on M/s. Adani Ahmedabad International Airport Limited - levy of GST on reimbursement claimed of Municipal tax, Property Tax and Water Charges by the AAI - levy of GST on transfer of spares and consumables for consideration by the AAI - rate of GST. Whether said business arrangement between AAI and SPV is a transfer of going concern or otherwise? - HELD THAT:- Transfer of a going concern means transfer of a running business which is capable of being carried on by the transferee as an independent business in continuity without any hindrance for a foreseeable period. Such transfer of business will comprise transfer of assets for running the business. Such transfer as going concern may involve transfer of employees as requisite to carry on the business without interruption. In effect, it implies that the business will continue in the new hands with regularity and a nature of permanency - subject business arrangement between AAI and SPV merits to be covered under transfer of going concern. Whether the transfer of business by AAI to SPV be treated as Supply under Section 7 CGST? - HELD THAT:- From the construction of the wordings in sections 18(3); 22(3) and 85(1); Schedule II(4) of CGST Act and the Rule 41(1) CGST Rule, it is found that ‘transfer of Business’ is more of an event in pursuance to a business arrangement - subject business arrangement is ‘Transfer of business of an independent part with respect to SVP International Airport’ by AAI to SPV for a period of fifty years which is a foreseeable future - subject supply is Transfer of Going Concern as an independent part with respect to the said Airport. Whether subject supply is made for a consideration in the course or furtherance of business or not - HELD THAT:- The consideration may be one time or in installments or as per the agreed terms between AAI and SPV. In this context, the payment made by the SPV to AAI includes the estimated deemed regulatory asset base, payment made by SPV towards the estimated initial non-aeronautical investments, Concession fees, all these payments are as per the terms and conditions of the contract and are the consideration to be paid by SPV to AAI for execution of the contract - thus, from Notification 12/2017 sr no. 2, it is clear that transfer of going concern is supply of service, we hold that subject business arrangement is Supply of Service as per section 7(1) CGST Act. Whether the transfer of business by AAI to SPV is treated as supply as going concern and covered in clause 4 of schedule II of CGST Act? - HELD THAT:- The subject transfer of business by AAI to SPV is treated as supply of going concern - AAI has not ceased to be a Taxable person as AAI has only transferred its Ahmedabad Airport business to the SPV but its other business are not transferred and for such business the AAI is a taxable person and registered under GST. The subject business arrangement is ‘transfer of going concern service’. There are no merit to vivisect the subject Contract and examine the treatment of aeronautical assets/ non aeronautical assets/ other business assets in the Contract entered between AAI and SPV. The substance of the Contract compels us, under GST scheme of law interpretation, to classify the Subject Business Arrangement as ‘Transfer of Going concern Service’. The subject transfer is that of transfer of going concern as an independent part. In this context, there are no merit to examine Schedule II(4)(c) CGST Act as it is limited to the transfer of business assets activity. Such attempt to vivisect the Contract renders a myopic view and runs counter to the ‘Transfer of Going concern service’ envisaged in the substance of the Contract. Also, GST on proposed supply of spares a.nd consumables by AAI to SPV, these supplies being outside the scope of subject contract, is leviable to tax as per law.
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