As against the earlier indirect tax regime, GST shall be charged to both the duty free shops and its customers at the Delhi's Indira Gandhi International Airport. This has come in after the Authority for Advance Ruling said in a PTI report that with the GST introduction, these shops are no more free from duties.
In a recent ruling, the New Delhi bench of the AAR has held the view that the supply of goods to the international passengers going abroad from 'duty free' shops may be taking place beyond the customs frontiers of India under Integrated GST Act, but the said shops are within the territory of India under the Central GST Act.
The ruling is in response to an applicant who runs a retail shop by the name Rod Retail Private Ltd at Terminal 3 of the airport. "The said outlet is not outside India... but the same is within the territory of India as defined under Section 2(56) of the CGST Act,2017 and Section 2(27) of the Customs Act, 1962, and hence the applicant is not taking goods out of India and hence their supply cannot be called 'export' under Section 2(5) of the IGST Act, 2017, or 'zero rated supply' under Section 2(23) and Section 16(1) of the IGST Act,2017. Accordingly, the applicant is required to pay GST at the applicable rates," the ruling said.
Goods are said to be exported only when they cross the territorial waters of India and the goods cannot be called to be exported merely on crossing the Customs Frontiers of India, as per the discussions before the AAR.
With PTI Inputs