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- Recently,the Allahabad high court has ruled that there shall be no Goods and Services tax(GST) levied in case of purchases made at duty free stores at the arrival or departure terminals.
- The court held that tax will not be levied as the goods has not crossed the customs border and passengers carry the items as their personal belongings.
- This ruling is similar to the one given by the Karnataka high court where in case of Flemingo Duty Free Shop,it was held that sale or purchase by duty free shops would be a transaction in the course of export or import.
- However,Madhya Pradesh high court had ruled that the transactions on duty free shops are liable to pay GST as supply to a duty-free shop by an Indian supplier is not to a place outside India and therefore such supplies do not qualify as exports under GST.
- The “duty” in duty-free refers to taxes.The duty-free shop is allowed to sell their materials exempt from various national and local taxes on the condition that the goods will be taken out of the country by international travelers.In the absence of taxes,duty-free shops are able to offer lower prices on their goods.
- GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty, VAT and service tax.It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.
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