A two-judge bench of the Madhya Pradesh High Court has asked the Central Board of Indirect Taxes and Customs (CBIC) to issue a clarification regarding the leviability of the Goods and Services Tax (GST) on the goods supplied through the duty-free shops in the International Airports in India.
Before the High Court, the petitioners contended that the duty-free shops at international airports in India are located beyond the customs frontier of India and any transaction that takes place in a duty-free shop is said to have taken place outside India and petitioner is not liable to pay any CGST, SGST and IGST.
Relying on the Apex Court decision in the case of M/s. Hotel Ashoka, they urged for an interim direction from the Court to direct the Board through member GST to issue necessary clarification regarding eligibility of refund of accumulated credit of CGST, SGST and IGST paid by the duty-free shops on goods and services supplied by the Indian supplier.
While passing an interim order, Justice P. K. Jaiswal and Justice S. K. Awasthi said that “Considering the aforesaid, we direct the learned Counsel for the respondents to seek instructions from the Board for issuance of clarification and response, as the matter is already settled by the Apex Court, within a period of ten days from today.”
Earlier, a few advance rulings passed by the States had said that the GST can be imposed on duty-free shops. The authorities had clarified that such outlets at the Delhi International Airport are not ‘free from duties’ under the new Goods and Services Tax regime.
Under the old tax regime, duty-free shops were exempt from the levy of central sales tax (CST) and value-added tax (VAT) as the sale from such shops were considered as exports and supplies were taking place beyond the ‘customs frontiers’ of India.
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