The Delhi Appellate Authority for Advance Ruling (DAAAR) ruled that the supply of goods to outbound international travellers comes beneath the supply on which GST will be levied and upholds the order of Delhi AAR.
The petitioner M/S Rod Retail Private Limited who used to supply the sunglass hut’ to international outbound passengers from the duty-free shop (retail outlet) which is mapped in the security hold area of IGI Airport, Delhi, security hold area is located outside the customs area and sees that, its supply of goods to international passengers is a zero-rated transaction, that is an export sale’ within the definition of that under section 2(5) of the IGST Act.
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The petitioner submitted that the Ld. authority would not be acknowledged the judicial legacy of the term “Customs Frontiers of India” which would be very important to decide the problem, which describes the export under Section 2(5) of the IGST act defines the process for the export and which would take the goods outside India.
The petitioner’s location of the shop was in the Security Hold Area (SHA) as described under s2(56) of the CGST Act, 2017 read with s2 (27) of the Customs Act, 1962. When the shop of the petitioner was located in SHA, similar to where it is located in India. It revealed that the transactions of the petitioner would take place in SHA, which comes within the definition of India, and the sale transactions of the petitioner would not be correlated with the export of goods under s2(5) of the IGST Act, 2017 read with s2(19) of the Customs Act, 1962.
Section 15 of the IGST act 2017 would be applied to the tourists who leave India and any supply of the goods taken out of India through him would get refunded in the way mentioned and the arguments of the petitioner which they must be treated equivalent to the duty-free shops (DFS) was not upheld.
Smt. Mallika Arya, Member (Centre), and Shri Ankur Garg, Member (State) held that “transactions of supply of goods to outbound international travellers fall within the definition of “taxable territory” and when to read in conjunction with section 7 of the CGST Act, 2017 forms “supply” and attracts the applicable GST on the date of supply of the goods.”
No issues is been found by the Bench ruling of Delhi AAR and upheld that Sh. Ashok K. Bhardwaj, Advocate & Sh. Manish Hirani, Advocate appeared for the petitioner.
