‘Duty-Free’ Shops Will Now Pay GST At Delhi International Airport!

International passengers will now have to pay goods and services tax on things bought from ‘Duty-Free’ shops at the Delhi International Airport. According to the Authority for Advanced Ruling(AAR) duty-free outlets at the Delhi Airport are not ‘free from duties’ under the current Goods and Services Tax regime.

Duty-free shops were exempted from Central Sales Tax (CST) and Value Added Tax (VAT) as the sale from such shops were considered as exports and beyond the limits of customs in India.

The AAR in a recent ruling said that the sales of goods to international passengers from “Duty-Free” shops may be taking place beyond the limits of the customs under Integrated GST Act, however, these outlets are within the territory of India under the Central GST Act.

The ruling was given by the AAR based on an application filed by Rod Retail Pvt Ltd which runs a retail outlet at Terminal 3 (International Departure) of Delhi International Airport.

Here are the highlights of the ruling –

• The AAR said that, Rod Retail Private Ltd is within the territory of India under the Central GST Act,2017 and Customs Act, 1962
• The Retailer is not taking goods out of India and hence their supply cannot be called ‘export’ under Integrated GST Act,2017
• Accordingly, the shop is required to pay GST at the applicable rates

Many retailers and shop owners are not happy with this decision as they feel that ‘Duty-Free’ shops will no more be “free from duty”. This decision would bring duty-free shops at par with other shops located outside the airport even after paying a hefty rent to the airport authorities, offering no incentive for duty free shop owners.

If you want to know more about ‘Duty-Free’ shops at your airport, simply download the AirWhizz App. Get information about places to shop and other services available at the airport for you on the move.