TMI Blog2018 (4) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. - AR No. 01/DAAR/2018 (In Application No: 01/DAAR/2017) - - - Dated:- 27-3-2018 - PANKAJ JAIN MEMBER (CENTRE) AND VINAY KUMAR MEMBER (STATE) Present for the Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flight, no supply to such passengers holding a domestic boarding pass is made by the applicant. 7. Presently, the applicant is charging SGST/CGST on the supply invoice issued to the International passengers. However, the applicant is of the view that, its supply of goods to international passengers is a zero rated transaction, being export sale within the meaning of the same under Section 2(5) of the IGST Act. 8. The issue is whether the location of the retail outlet of the applicant in the Security Hold Area of the International departure is outside India though geographically it is within the territory of India. The said area is after crossing the Customs Frontier of India and is claimed to be situated outside the territory of India. Details of Question on which Advance Ruling is requested: 9. Whether the supply of sunglasses from the retail outlet of the applicant at Terminal 3, IGI Airport (International Departure), New Delhi, to outbound international passengers against the international boarding pass is liable to SGST under the DGST Act, 2017 and CGST under the CGST Act, 2017 or is it a zero rated export supply within the meaning of Section 2(23) r/w Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Supreme Court of India in the case of M/s Hotel Ashoka (Indian Tourism Development Corporation Limited) V/s Assistant Commissioner of Commercial Taxes and Another, decided on 03.02.2012 = 2012 (2) TMI 62 - Supreme Court of India expressed a view that such sales are constitutionally exempt from tax under Article 286 of the Constitution of India (being sales in the course of export out of India within the meaning of Section 5(1) of the CST Act). The apex Court in the said decision took note of the fact that Duty Free Shops are located in a Zone which is entered by crossing the customs frontier of India, i.e. they are not within the customs frontiers of India and any sales from the said area is duly covered under Section 5(1) of the CST Act. The apex Court further opined, that, submissions with regard to sale not taking effect by transfer of documents of title to the goods is one of the methods whereby delivery of the goods is effected. Delivery may be physical also. In the case of the duty free shops which are outside the customs frontiers of India, the goods have been sold to the customers by giving physical delivery. Hence, the territorial extent of India starts after cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction when the goods (sunglasses) are brought into its retail outlet, they do so by crossing the customs frontiers of India (landside of the airport to the airside by crossing the customs and into Security Hold Area where the outlet is located) and which satisfies the first limb of the definition of the export of goods taking goods out of India. When the goods are supplied to the International passengers from the retail outlet against the international boarding pass, the second limb of the definition of export of goods is also satisfied as the boarding pass gives the destination of the passengers to a place outside India. 19. The applicant has requested that supply of sunglasses to the international passengers from its retail outlet at Terminal 3 (International Departure), IGI Airport, New Delhi, is an instance of export of goods and is a zero rated supply under Section 16 of the IGST Act and which means that the applicant has no tax (SGST/CGST) liability on the said transaction of supply under the DGST Act, 2017 or CGST Act, 2017. Comments of Jurisdictional Officer (SGST): 20. The applicant has paid ₹ 1,94,71,525 as VAT during the year 2016-17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export. (4) The provisions of sub-section (3) shall not apply to any sale or purchase of goods unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority. (5) Notwithstanding anything contained in sub-section (1), if any designated Indian carrier purchases Aviation Turbine Fuel for the purposess of its inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, means taking out of India to a place outside India; (iii) Section 2(27): India includes the territorial waters of India; 27. The Section 3 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 read as under: (1) The sovereignty of India extends and has always extended to the territorial waters of India (hereinafter referred to as the territorial waters) and to the seabed and subsoil underlying, and the air space over, such waters. (2) The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline. (3) Notwithstanding anything contained in sub-Section (2), the Central Government may, whenever it considers necessary so to do having regard to International Law and State practice, alter, by notification in the Official Gazette, the limit of the territorial waters. DISCUSSIONS: 28. The issue for decision is whether the supply of goods made to international outbound passengers holding international boarding pass from the retail outlet of the applicant which is located in the Security Hold Area of the IGI Intern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de India i.e. whether they are beyond airspace on territorial waters of India . 32. In the present case, as per Section 2(5) of the IGST Act 2017, export of goods takes place only when goods are taken out to a place outside India. Further, India is defined under Section 2(27) of the Customs Act, 1962 as India includes the territorial waters of India . Similarly, under CGST Act 2017, under Section 2(56), India means the territory of India including its territorial waters and the air space above its territory and territorial waters. Hence, 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. 33. However, under GST regime effective from 01.07.2017, the applicant has claimed that no GST is payable on such supply taking place beyond the customs frontiers of India as the same should be considered as exports of goods under Section 2(5) of the IGST Act 2017 and should be zero rated supply under Section 2(23) r/w Section 16(1) of the IGST Act 2017. 34. It is observed that export of goods has been defined under Section 2(5) of the IGST Act, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
