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2018 (4) TMI 938 - AAR - GSTZero rated supply or not - supply from the shop located in the Security Hold Area of the IGI International Airport - supply to an International outbound passengers holding international boarding pass – applicable rate of 28% or otherwise - Held that:- the goods can be said to be exported only when they cross the territorial waters of India and the goods cannot be called to be exported, merely on crossing the Customs Frontiers of India. “export of goods” has been defined under Section 2(5) of the IGST Act, 2017 as taking goods out of India to a place outside India. The India is defined under Section 2(56) of the CGST Act as “India”. Hence, when goods are exported by Air, the export will be completed only when goods crosses airspace limits of its territory or territorial waters of India. Decision of Supreme Court in the case of Collector of Customs, Calcutta V/s Sun Industries [1988 (4) TMI 49 - SUPREME COURT OF INDIA] followed. – Though, this case was against the revenue allowing duty drawback to the exporter, but since the term “taking out to a place outside India” has been discussed by the apex court in this case, the same has been followed. Further, the decision of the Supreme Court in the case of Hotel Ashoka (INDIAN TOURISM DEVELOPMENT CORPN. LTD.) [2012 (2) TMI 62 - Supreme Court of India] distinguished on the ground that - the Hon’ble Supreme Court had interpreted the scope of Section 2(11) of the Customs Act, 1962 under which “Customs area” were defined. No doubt, the duty free shops may be established beyond the Customs Frontiers of India. However, the issue in the present case is whether the said duty free shops are outside India i.e. whether they are “beyond airspace on territorial waters of India”. The applicant is not taking goods out of India and hence their supply cannot be called “export” under Section 2(5) of the IGST Act, 2017 or “zero rated supply” under Section 2(23) and Section 16(1) of the IGST Act, 2017. Accordingly, the applicant is required to pay GST at the applicable rates.
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