Int’l Passengers Need Not Pay GST at Duty-free Shops
International passengers who purchase products at duty-free shops at the airport will not be subject to GST and the revenue department will soon clarify this exemption.
Following an order approved in March by the New Delhi Court of the Advanced Resolution Authority (AAR), which established that GST would be applicable to the sale of duty-free products at airports, the revenue department had received several clarifications on the subject.
The revenue department will clarify that duty-free stores will only have to pick up a copy of the passenger’s passport from whoever sells the merchandise and then request reimbursement from the government’s GST.
The AAR order had put these stores in a difficult situation, as they were exempt from the central sales tax and the value-added tax in the previous indirect tax regime.
In that mechanism, the sale of such stores was considered as exports and supplies that took place beyond the “customs frontiers” of India.