An order was passed by the MP High Court In a writ petition filed by M/s. Vasu Clothing Private Limited claiming exemption from paying GST on his supplies at the Duty Free Shops. The merchant claimed exemption from paying GST for the supplies done at the duty free shops as the Duty Free Shops are provided special privileges under various acts. The duty free shops are provided special storage license under Section 58-Aof the Customs Act, 1962 for depositing notified class of goods andsuch warehouse are kept locked by the proper officer & where no entryof any person or removal of goods are allowed withoutthe permission of the proper officer.
The petitioner contended that the goods being supplied are cleared only for the purpose of being sold at the International Airports. The petitioner further said that before implementation of GST the supplies to such duty free shops were exempted from any kind of Customs Duty, Countervailing Duty, Special Additional Customs Duty, Excise Duty, VAT / Sales Tax, etc.
The petitioner claimed that during the earlier stages of the implementation of GST there was no clarity as to exemptions under the new act which deprived the petitioner from the opportunity of doing business. The petitioner by citing the enactments and laws of other countries prayed to the court for issuance of order that supply to the Duty free shops to be exempted from paying taxes under the GST.
The division bench comprising of Justice Satish Chandra Sharma and Justice Virender Singh observed that location of the Duty Free Shops, whether within customs frontier or beyond, shall be within India as long as it is not beyond the Exclusive Economic Zone - 200 nautical miles.The court also said as prescribed in the CGST Act, for the purpose of CGST Act, India extends upto the Exclusive Economic Zone - 200 nautical miles from baseline& thus the location of EEZ’s shall be within India as long they are not beyond 200 nautical miles.
The courtfurther observed that the concessions/exemptions granted by the earlier enactments before GST cannot be claimed as a matter of right. The court delivered the order by stating that Duty Free Shops cannot be said to be located outside India under the GST act as they are located within 200 nautical miles from the baseline, &thereforesuch supplies do not fall under term export of goodsunder GST. Subsequently, such supplies cannot be made without payment of duty.
Courtesy/By: Mayank Agarwal
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16 Jan 2019
