Duty-Free Shops At 17 Indian Airports Exempted From Paying GST!
Last week we mentioned how international flyers will have to pay GST for duty-free shopping at the Delhi Airport. The Authority For Advanced Ruling(AAR) had announced that ‘Duty-Free’ shops at Delhi airport will have to pay Goods and Services Tax(GST).
But it seems for now, prices of perfumes, chocolates and tobacco sold at duty-free shops in Kolkata and 16 other international airports in the country will not be increased.
Flyers purchase liquor, perfumes and tobacco at duty-free shops as they get international brands at prices that are 30-40% lower than the market. If the AAR’s decision is implemented, the price of goods other than liquor will go up by 9-14%.
Duty-Free shops were exempted from giving Central Sales Tax(CST) and Value Added Tax(VAT) prior to GST, as sales from such shops were considered as exports and beyond the custom’s limit. However, the Delhi branch of AAR has now ruled that duty-free shops are within the territory of India and hence, subject to CGST. GST rate on chocolates and perfumes is 18% and tobacco is 28%.
Here are a few facts on duty-free shops in India:
- Liquor sales account for 80% of the total sales at Duty-free shops in India.
- Chocolates account for 10% of the total sales followed by cigarettes and perfumes that split the rest.
- The duty-free market in India is valued at $200 million.
- Sales for duty-free stores at Kolkata airport is the sixth largest in India.
Retailers and owners of duty-free shops at the airport hope that the AAR’s decision is not implemented as there won’t be any difference between a duty-free shop and a store located outside the airport. Sales will reduce at duty-free shops, and it will make no sense for retailers to pay huge rentals to do business at the airport.
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.