New Delhi: In an attempt to provide relief to all those people buying perfumes, chocolates and other items from duty-free stores, the High Court ruled that Goods and Service Tax will not be levied on purchases made at arrival or departure terminals – TNN.
This judgement of Allahabad high court judgment may, however, provide some relief with the court ruling. The court held that tax will not be levied as the goods never cross customs border and passengers carry the items as their personal effect.
The ruling is similar to the one by Karnataka high court where in case of Flamingo Duty-Free Shop, it was held that sale or purchase by such stores would be a transaction in the course of export or import.
The Authority for Advance Ruling (AAR) had held that supply of goods to passengers going abroad from duty-free shops at Delhi International Airport is liable to GST. Alcohol, which is the most popular item at dutyfree shops, is outside the ambit of GST – TOI report.
The national publication quoted Harpreet Singh, partner at consulting firm KPMG as saying, “Applicability of GST on duty-free shops has been a perennial issue under the erstwhile VAT regime with multiple diverse rulings. The situation has not improved even under GST on account of diverse rulings by MP and Karnataka high courts. The new ruling seems to have rightly interpreted the provisions under the GST law as well as baggage rules to arrive at the conclusion which appears to be rational and in line with the legislative intent.”