In a recent ruling dated October 1, 2025, the Gujarat Authority for Advance Rulings (AAR) addressed the case of M/s RDB Infrastructure and Power Ltd., a registered real estate developer involved in a public housing redevelopment project under the Surat Municipal Corporation's 2016 Redevelopment Scheme. The project entailed constructing residential units for original occupants and additional affordable housing, along with developing commercial "Free Sale Land" leased for 99 years. M/s RDB Infrastructure proposed transferring the entire project to M/s Samprati Buildcon Pvt. Ltd. for ₹60 crores, structured as a slump sale on a going concern basis.
The primary issue was whether this transfer qualified as a taxable supply or was exempt under GST regulations, specifically under Entry 2 of Notification No. 12/2017-CT (Rate). The AAR determined that even though "slump sale" is not explicitly defined under GST law, the transaction constituted a transfer of business as a going concern. This classification was based on the complete transfer of assets, rights, and liabilities of the project, which is an independently functional unit.
Read More: GST - ITC allowed as underground transmission cables, switchyards, and related equipment being movable and relocatable [Order attached]
The AAR classified the transaction under SAC 997119, relating to "financial and related services," and confirmed it is covered by Entry 2 of the relevant notification, which exempts such transfers from GST. The exemption applies if the entire project and its operations are transferred as a whole, with a legally enforceable agreement. Consequently, the proposed transfer was deemed exempt from GST, provided all stipulated conditions are met.
Order Date: 01 October 2025
Case Title: M/s RDB Infrastructure and Power Ltd.
Facts:
- The applicant, M/s RDB Infrastructure and Power Ltd., a registered real estate developer, was engaged in a public housing redevelopment project allotted by the Surat Municipal Corporation under the 2016 Redevelopment Scheme.
- The project involved construction of residential units for original occupants, additional affordable housing for low-income groups, and development of “Free Sale Land” leased to the applicant for 99 years for commercial use.
- The applicant proposed to transfer the project, including all assets, liabilities, and rights, to M/s Samprati Buildcon Pvt. Ltd. for ₹60 crores on a slump sale and going concern basis.
- The applicant sought advance ruling on whether the transaction qualifies as a slump sale, its classification under GST, and eligibility for exemption under Notification No. 12/2017-CT (Rate) dated 28.06.2017.
Issue:
- Whether the transfer of a redevelopment project as a going concern amounts to a taxable supply or qualifies for exemption under Entry 2 of Notification No. 12/2017-CT (Rate)?
Order:
- The Authority observed that though the term “slump sale” is not defined in GST law, the proposed transfer qualifies as a transfer of business as a going concern, since it involves complete transfer of assets, rights, and liabilities of an independently functional unit.
- The transaction is classifiable under SAC 997119 relating to “financial and related services” and is covered by Entry 2 of Notification No. 12/2017-CT (Rate), which exempts transfer of a going concern from GST.
- The AAR held that the exemption would apply only if the entire project with its operations is transferred as a whole, and the agreement between parties is valid and legally enforceable.
- Accordingly, the proposed transfer of the redevelopment project on a going concern basis was declared exempt from GST.
