New Delhi: The Kerala High Court has set aside an order rejecting refund of Input Tax Credit (ITC) to Duty Free Shops (DFS) located at the international airports.
The petitioner shall pay the GST on input services including Concession Fee to the Airport Operator and claim ITC of the entire tax amount and thereafter claim refund of the same by following the procedure, a single judge Bench ruled, while disposing seven similar petitions filed by Flemingo Duty Free Shop and CIAL Duty Free and Retail Services, Cochin with Central Government, Central Tax Department in State, State Government and Calicut International Airport. The Bench made one particular petition the base one with Flemingo Duty Free as petitioner and Centre, State, Airport Government and Calicut Airport as respondents, therefore, making the ruling applicable in all remaining matter.
It observed that petitioner(s) sell to the international passengers — departing passengers or passengers arriving into India — goods such as cigarettes, alcohol, perfumes, chocolates and cosmetics, etc. It is a matter of record that all the goods which are sold at the DFSs are either imported or purchased from Indian market and are stored in Customs bonded warehouses. The goods which are brought from customs warehouses do not cross customs frontiers, thus, before the goods are imported in the country, they had been sold at DFSs.
“In my view, if the transaction of sale or purchase takes place when the goods are imported in India or they are being exported from India, no State can impose any tax thereon. It is also not in dispute that all the DFSs are situated at international airports i.e. at Cochin and Calicut, which are beyond the Customs frontiers of India and would not be within the customs frontiers of India. When any transaction takes place outside the customs frontiers of India, of course the transaction is said to have taken place outside India, though the transaction might take place within India,” the Bench said.
27/09/20 Shishir Sinha/Business Line
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