Mumbai: Observing that the GST regime is based on 'one nation, one tax theory', the Bombay High Court quashed a Maharashtra Sales Tax order that had refused refund of input tax credit to the duty-free shops at the Mumbai international airport.
Noting that these shops are eligible to get refund of the input tax credit on the entire amount of Goods and Services Tax (GST) paid, the high court said the imposition of local taxes on these outlets would hamper foreign trade.
A division bench of justices Ranjit More and Bharati Dangre quashed and set aside the January 10 order passed by the Deputy Commissioner of Sales Tax (Mumbai) refusing to refund the input tax credit to the petitioner (owner of duty free shops in Mumbai International Airport Limited-MIAL) pursuant to the sale of duty-free goods from the shops at the departure area of the airport.
The bench noted that the previous order was arbitrary and against the provisions of Article 286 of the Constitution.
Under this article, no state shall impose tax on supply of goods that takes place outside of the state territory and in cases where the supply is made in the course of import into India or in the course of export out of India.
In its order dated October 7, the high court bench noted that if a duty free shop, which caters to international passengers, is subjected to local taxes by the state then the price of the goods, which are supposed to be free of taxes and duties, will go up.
09/10/19 PTI/Times of India
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Noting that these shops are eligible to get refund of the input tax credit on the entire amount of Goods and Services Tax (GST) paid, the high court said the imposition of local taxes on these outlets would hamper foreign trade.
A division bench of justices Ranjit More and Bharati Dangre quashed and set aside the January 10 order passed by the Deputy Commissioner of Sales Tax (Mumbai) refusing to refund the input tax credit to the petitioner (owner of duty free shops in Mumbai International Airport Limited-MIAL) pursuant to the sale of duty-free goods from the shops at the departure area of the airport.
The bench noted that the previous order was arbitrary and against the provisions of Article 286 of the Constitution.
Under this article, no state shall impose tax on supply of goods that takes place outside of the state territory and in cases where the supply is made in the course of import into India or in the course of export out of India.
In its order dated October 7, the high court bench noted that if a duty free shop, which caters to international passengers, is subjected to local taxes by the state then the price of the goods, which are supposed to be free of taxes and duties, will go up.
09/10/19 PTI/Times of India
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