2018 (12) TMI 1278 – BOMBAY HIGH COURT – TMI – Levy of GST / import duty goods purchase from Duty free shops – shops situated before immigration clearance by a passenger – Exemption on sale of cosmetic products, perfumes etc. to the International passenger – refund of any input tax paid on input supplies and input services – Held that:- The Central Government holds that the transactions effected at the duty free shops at the arrival or departure of the International Airports in India might have taken place within the geographic territory of India, but for the purposes of levy of Customs Duties or any other taxes, the area of duty free shops shall be deemed to be the area beyond the customs frontiers of India. Although, the applicant bought goods from duty free shop at CSI Airport Mumbai, the same are deemed to be imported from across the Customs Frontiers of India and customs duty is payable on such goods. Since the applicant crossed the green channel without declarations and without
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services from the retail shop which the petitioner intends to set up at the Domestic Security Hold Area at Dr.Babasaheb Ambedkar International Airport (hereinafter referred to as the Nagpur Airport ). 2. It is submitted that presently sale of similar products to international passengers are permitted without levy of Customs duty and applicable taxes under the CGST/IGST/SGST from the duty free shops located in the arrival and departure halls of International Airports in India. Petitioner, therefore, claims that similar benefit should be granted to him so that he can sell the products to International passengers who commence their journey from Nagpur Airport and thereafter, depart from India from a transit International Airport in India from his shop located at the Domestic Security Hold Area at Nagpur. Learned Counsel for the petitioner submitted that since the process of tender for grant of such shop is in progress and in the event the petition is allowed, petitioner would be able to
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kes on rent a private bonded warehouse located near the Airport as well as certain shops called 'dutyfree shops' at the arrival and departure terminals of the International Airports in India. The duty free operator is granted special warehouse license under Section 58A of the Customs Act, 1962 for depositing notified class of goods and such warehouse are kept locked by the proper Officer and no entry of any person or removal of goods therefrom are allowed without the permission of the proper Officer. The goods are warehoused at the Special Warehouse without payment of duty and then transferred to the dutyfree shops without payment of duty from where they are sold to International passengers without payment of duties and taxes. 3. According to petitioner, the entire movement of goods from Special warehouse to duty free shops for the purpose of sale at arrival and departure strictly happens as per the Warehousing provisions under Chapter IX of the Act and under customs supervisio
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ioner submits that with effect from July, 2017, the respondent no.1 promulgated and notified CGST, IGST and various State Governments promulgated SGST. That by virtue of enactment of the GST Legislations, more specifically Proviso to Section 5(1) of the IGST, an importer of goods is liable to levy of integrated tax on goods imported into India. In the case of IntraState supply, when the location of the supplier and the place of supply i.e. location of the buyer are in the same State, a seller has to collect both CGST and SGST from the buyer. The CGST gets deposited with Central Government i.e. respondent no.1 and SGST gets deposited with respondent no.2. The petitioner submits that, due to unique location and nature of business of the duty free shops in India, the duty free operator is neither charged IGST/customs duty on imports nor is required to collect tax under CGST and SGST on the supplies made to the International passengers. 5. In the background of case of petitioner as aforesa
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order dt.31.8.2018 bearing No.634/2018CUS( WZ)/ASRA/MUMBAI passed under Section 129DD of the Customs Act, 1962 in the case of Aarish Altaf Tinwala. 7. To sum up, it is the case of petitioner that presently a lot of International passengers take their fights from the Nagpur Airport to travel outside India through a transit International Airport. An International passenger who departs from the Nagpur Airport to a transit International Airport wherefrom he/she can embark the International flights to foreign destination can get their baggage through checked in at the Nagpur Airport and the Nagpur Airport also issues the said International passenger boarding passes for the flight which travels to the transit International Airport as well as the International flights which departs India. The petitioner submits that once an International passenger through checks in and receives boarding passes at the Nagpur Airport, the products can be sold to him/her without duty and GST. The only difference
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has completed the immigration formalities, he is said to have entered Indian Territory. Thereafter, the goods purchased from the duty free shop situated in the Arrival Hall are not imported. Hence, any such purchases made from the duty free shop are not liable for imposition of customs duties. Therefore, the impugned goods have been wrongly confiscated by the Customs and should be released. 9. The Central Government is of the considered opinion that the contentions of the application are based on the erroneous belief and wrong interpretation of the law and settled legal positions. 10. Section 2(11), Section 2(25) and Section 2(27) of the Customs Act 1962 states as under : Section 2 : Definitions – In this Act unless the context otherwise requires : (11) customs area means the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by the Customs Authorities; (25) imported goods means any goods brought into India from
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duty on being exported by duty free shops and imported by passenger in terms of Section 77 of the Customs Act, 1962. The contention of the Applicant that he had entered Indian Territory after immigration formalities and having bought goods within the confines of Indian Territory and is, therefore, not liable to pay customs duty is not legally sustainable. 12. The Hon'ble Supreme Court of India in the case of M/s. Hotel Ashoka vs. the Assistant Commissioner of Commercial Taxes and Anr. (Civil Appeal No.2560 of 2010) reported in (2012) 3 SCC 204 has held that 18. It is an admitted fact that the goods which had been brought from foreign countries by the appellant had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. It is also an admitted fact that the appellant had executed bonds and the goods, which had been brought from foreign countri
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be said to have taken place outside India. Though the transaction might take place within India but technically looking to the provisions of Section 2(11) of the Customs Act and Article 286 of the Constitution, the said transaction would be said to have taken place outside India. In other words, it cannot be said that the goods are imported into the territory of India till the goods or the documents of title to the goods are brought into India. Admittedly, in the instant case, the goods had not been brought into the customs frontiers of India before the transaction of sales had been taken and, therefore, in our opinion, the transactions had taken place beyond or outside the custom frontiers of India. 10. Therefore, the Central Government, in view of the above holds that the transactions effected at the duty free shops at the arrival or departure of the International Airports in India might have taken place within the geographic territory of India, but for the purposes of levy of Custom
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stoms frontiers of India and the transaction would be said to have taken place outside India. 12. The aforesaid Judgments are clearly applicable only in respect of supplies to or from duty free shops situated after the passenger crosses the immigration counter beyond the Customs Frontiers, at arrival or departure hall of International Airport Terminals, where the transaction would be said to have taken place outside India. The International travel of incoming or outgoing passenger after immigration clearance would be beyond any doubt. In such event, whether it is the sale/purchase/supplies of goods or services, to or from such duty free shop, the same is said to be taken place outside India. Hence, the same would be a nontaxable supply under Section 2(78) of CGST/SGST and such duty free Shops located at the International Airports would be in nontaxable territory as defined in Section 2(79) of CGST/SGST. As per section 2(24) of IGST, the same meaning as given in CGST/SGST applies for IG
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