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In case of “Atin Krishna V. Union of India”,at the arrival and departure terminals of international airports the sale or supply of goods at the Duty-Free Shops would be considered as Export of Goods under Customs Law and would also be considered as export of goods under GST Act, hence, no tax shall be levied in case of purchase made at Duty-Free Shops.
In the case of Atin Krishna V. Union of India, the Petitioner had filed a petition-
Further, the Petitioner contended that the provisions of the abovementioned statutes are being misinterpreted which results in providing various exemptions to the Duty-Free Shops which is causing huge loss to the public interest.
The petitioner has raised the following contentions mentioned below-
Duty-Free Shops are liable to pay IGST on the goods imported into the territory of India.
The contention of the petitioner was also that the sale by Duty-Free Shops must suffer IGST the moment the goods cross the territorial waters of India, therefore such supply of goods by Duty-Free Shops must be subjected to tax under Section 5 of IGST Act.
Sale of goods by the Duty-Free Shops to international passengers at arrival terminals should be considered as intra state supply of goods and applicable taxes under Section 9 (1) of CGST Act and SGST Act should be charged on such sale.
Duty-Free Shops are incorrectly permitted to claim a refund of ITC (Input Tax Credit) on GST paid on service of renting of immovable property by Airport Authority of India and procurement of domestic goods and services because such refund is granted when sale made to international passengers at departure terminal is the export of goods hence, zero-rated.
In the judgment it was held by the Hon’ble Bench that –
As a conclusion, there cannot be an inter-state supply liable to CGST and SGST under Section 9 of the CGST Act and SGCT Act termed as inter-state supply. Therefore, there cannot be an inter-state supply liable to CGST and SGST under Section 9 of the CGST Act and SGCT Act.
Hence, the stage for payment of the customs duty or IGST does not arise when the goods are imported from outside India and are kept in the customs warehouse and exported therefrom.
Furthermore, by rejecting the contention of the Petitioner the Hon’ble Bench clarifies that
Conclusively, in reply to one of the contentions raised in a petition, the Hon’ble Bench held that sale or supply of goods falls under export of goods. Therefore, Duty-Free Shops are entitled to claim a refund of Input Tax Credit on GST paid on service of renting of immovable property by Airport Authority of India and procurement of domestic goods and services.
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