The Karnataka Authority of Advance Ruling (AAR) has held that Commercial Metro Developer does not qualify to be a “Government Authority” and is not eligible for exemption from payment of GST.
The bench of Pratap Kumar S and Kalyanam Rajesh Rama Rao has observed the applicant being the commercial entity owning the metro stations and it is the exclusive property of the applicant and thus such properties cannot take the colour of public amenities. The applicant is not covered under “Government Authority”.
The applicant, M/s Bangalore Metro Rail Corporation Limited stated that they are a Company incorporated under the Companies Act, 1956; is a joint venture of Government of India and Government of Karnataka (both the Governments) holding 50% equity shareholding) and is a Special Purpose Vehicle entrusted with the responsibility of implementation and operation of Bangalore Metro Rail Project.
The applicant stated that the metro project undertaken by them has a north-south corridor measuring 17 km long and for which, the total project cost is estimated to be INR 4,202 crores; the Applicant is the absolute owner of the entire Metro network, tracks and Metro stations along with the structures constructed thereon within the jurisdiction of Bangalore City; the Applicant, with an intention to augment funds for the metro project has identified and invited applications from private entities/companies to partly fund the total project cost and M/s Embassy Property Developments Private Limited had agreed to invest certain amount for construction of the “Kadubeesanahalli Metro Station” on the Outer Ring Road in consideration of which the applicant will grant certain concession.
The applicant sought the advance ruling on the issue whether the Applicant is a “Government Authority” vide Paragraph-2(zf) of Notification no. 12/2017-CT (Rate) dated 28.06.2017 as amended from time to time and would fall within the scope of Sl.No.4 of the said exemption notification.
Yet another issue raised was whether the activity of grant of concession in terms of MOU dated 04.06.2018 to the “Concessionaire” is eligible for exemption from payment of GST vide SI.Nos.4 of exemption notification no. 12/2017-CT (Rate) dated 28.06.2017. Consequently, no GST needs to be discharged by the Applicant on such activity.
The AAR observed that the applicant has not been established to carry out either of the functions of Urban planning including town planning, Regulation of land-use and construction of buildings, Planning for economic and social development, Provision of urban amenities and facilities such as parks, gardens, playgrounds and Public amenities including street lighting, parking lots, bus stops and public conveniences. The applicant constructs the metro stations exclusively to carry on their business.
The AAR held that The activity of grant of concession in terms of MOU dated 04.06.2018 to the “Concessionaire” is not eligible for exemption from payment of GST vide Si.Nos.4 of exemption notification no. 12/2017-CT (Rate) dated 28.06.2017, as the applicant does not qualify to be a “Government Authority”.
Ruling Details
Applicant’s Name: Bangalore Metro Rail Corporation Limited
Ruling Date: 28-07-2025
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