Goods purchased from Duty Free Shops in Indian Currency: Limit of 25K applicable to Payments through Debit/Credit Cards, says CBEC [Read Circular]

Duty free- GST

The Central Board of Excise and Customs (CBEC) today clarified that the exemption limit of Rs. 25,000 for sale of goods at duty free shops in Indian currency shall also be applicable to payments through an INR credit card / debit card.

In July 2016, the Revenue department had asked the duty free shops at airports to display prices of goods in Indian currency as well as the exchange rate. It is in line with a RBI notification, the Central Board of Excise and Customs (CBEC) permitted the passengers to purchase goods at duty free shops in Indian rupees up to Rs 25,000.

In connection with this, there was a lack of clarity in use of INR credit cards/debit cards for making payments by passengers at duty free shops located at International Passenger Terminals. It has been stated that merchandise on display at duty free shops is denominated in foreign currency and passengers have to bear conversion charges alongside of transaction fee and other charges.

With regard to this, the Board has now clarified the following;

  1. Instructions contained in para 2 and 3 of circular 31/2016 dated 6th July 2016 regarding ceiling in payment in Indian Currency (i.e. in cash) at Duty Free Shops remain unaltered (i.e. Rs. 25,000);
  2. Payments made through an INR credit card / debit card at Duty Free Shops located in the arrival hall shall also be subject to a limit of Rs 25,000/- for an incoming passenger;
  3. However, payments through a INR credit card or debit card at Duty Free Shops located in the departure hall shall be without limit for an outgoing passenger;
  4. Duty Free Shops shall ensure that passenger making payments through an INR credit/debit card are not subject to paying for merchandise in foreign currency and accordingly do not have to bear any attendant charges for conversion of foreign exchange;
  5. Since prices of merchandise for sale at a Duty Free Shops shall, henceforth, only be displayed in INR, any passenger desiring to make a payment in any foreign currency, shall be charged in foreign currency by applying the rate of exchange notified under Section 14 of the Customs Act, 1962 from time to time.
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