No More GST @ Duty Free Shops @ Airports in India
Now international passengers not required to pay gst at airport ‘duty-free’ shops. ‘Duty-free’ shops in airports in the nation will not collect goods & services tax on the purchase and the Department of Revenue will remain to explain the situation sooner about this exemption. Previously, the New Delhi Bench of the Advance Decision Authority aka AAR had stated in a mechanism provided in March that GST would be made available on the sale of commodities from the ‘duty-free’ shops on airports. After the AAR’s decision, the Dept. of Revenue had the letter from several parties, in which the appeal was done to clarify the circumstance.
The official said, “The Department of Revenue has always been clear that we can not export our taxes. We will issue explanations, which will be clear that duty free shops will not be GST. The Department of Revenue will clarify that duty-free shops will only have to take copies of passports from those passengers whom they sell the goods and later these shops will be able to claim the refund of the GST refund on the purchase of their goods to the government. Copy of passport will be considered as proof of sale of goods.
According to experts, order of the Competition Ruling Authority (AAR) has created confusion. Prior to the implementation of GST system, they were exempt from Central Sales Tax and Value Added Tax (VAT). The sale of products from these stores in previous indirect tax system was considered to be export. Rajat Mohan, partner of AMRG and Associates, said that duty-free shops have been kept free of tax burden globally. Mohan said, “GST Policy Cell is in the process of introducing circular, in which things will be clarified about the status of such duty-free shops. Also, there may be a mention of the detailed procedure for the return of tax paid.