{"id":21773,"date":"2020-12-12T14:47:59","date_gmt":"2020-12-12T09:17:59","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=21773"},"modified":"2023-02-28T14:26:35","modified_gmt":"2023-02-28T08:56:35","slug":"gst-at-duty-free-shops","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/","title":{"rendered":"A Detailed Discussion on GST at Duty-Free shops"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Duty-free shops are mostly noticed at\nthe departure area of the International airports. They are kind of retails\noutlets that produce the goods locally and are exempted from payment of the\nlocal taxes. In the system, one condition has to be fulfilled that such goods\ncan be sold only to the tourists who will take and use those goods outside\nIndia. Since there is the tax exemption applicable to the international\npassengers, they tend to buy goods from Duty-free shops at the airport. Lets\ndiscuss about GST at\nDuty-free shops.<\/p>\n\n\n\n<p>In accordance with GST Laws, an outgoing\ninternational tourist is that person who is not an ordinary resident of India\nhowever comes to India for the stay not exceeding six months for the purpose of\nlegitimate non-immigrant purposes.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/#An_Inverted_Tax_Structure_of_GST_at_Duty-Free_Shops\" >An Inverted Tax Structure of GST at Duty-Free Shops<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/#Refund_of_GST_at_Duty-free_shops_accumulated_ITC\" >Refund of GST at Duty-free shops accumulated ITC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/#Conditions_must_be_fulfilled_for_a_Refund_of_GST_at_Duty-free_shops\" >Conditions must be fulfilled for a Refund of GST at Duty-free\nshops<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/#Procedure_to_Claim_Refund_GST_at_Duty-free_shops\" >Procedure to Claim Refund GST at Duty-free shops<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/gst-at-duty-free-shops\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_Inverted_Tax_Structure_of_GST_at_Duty-Free_Shops\"><\/span>An Inverted Tax Structure of GST at Duty-Free Shops<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The supply only which is outward at the\nduty-free shop will get exempted from tax. However, these shops have to pay the\nGST on the inward supply of the goods. It further creates an inverted tax\nstructure. This type of structure occurs when a rate of tax in the inward\nsupply is more than a tax rate of the outward supply.<\/p>\n\n\n\n<p><strong>For Instance<\/strong>, if a duty-free store at the airport sells the handbag made of fabric at Rs. 1500 (without GST Tax) to the foreign passenger. In case if a person has bought the same bag from the wholesaler, then the will be Rs 1000 that includes 5% GST. In this case, he only pays the GST at duty-free shops on the inward supply, but there will be a tax-exempt on an outward supply. In accordance with the notification no. 31\/2019 issued by the government, the taxpayer can claim a refund of Goods and Services Tax paid on the inward supplies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Refund_of_GST_at_Duty-free_shops_accumulated_ITC\"><\/span>Refund of GST at Duty-free shops accumulated ITC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under GST law, the registered taxpayer will be eligible to get the refund of an unutilised (ITC) Input Tax Credit on basis of the Inverted tax structure. All details are required to be fulfilled to claim the GST at Duty-free shops  and procedure must be fulfilled are as per the the <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST registration<\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_must_be_fulfilled_for_a_Refund_of_GST_at_Duty-free_shops\"><\/span>Conditions must be fulfilled for a Refund of GST at Duty-free\nshops<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A retail outlet which is situated at departure area of an International airport can declare the GST refund which was paid for the purchases of goods only if the below-mentioned conditions are fulfilled:-<\/p>\n\n\n\n<ul><li>The products that are supplied\nmust be domestically produced and has to be ingenious.<\/li><li>Where an inward supplies are\nreceived from the taxpayer, who must be registered against the tax invoice.<\/li><li>If at any time goods are being\nsold to an outgoing foreign tourist without charging any tax and further sold\nagainst the foreign exchange.<\/li><li>The GSTIN &amp; the name of the\nretail outlets are cited on a tax invoice of the Inward supply.<\/li><li>Any other conditions that may\nbe specified from time to time.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_to_Claim_Refund_GST_at_Duty-free_shops\"><\/span>Procedure to Claim Refund GST at Duty-free shops<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Duty-free shop is eligible to claim refunds of the accumulated ITC by registering in form GST RFD- 10B on the quarterly and monthly basis solely dependent on frequency of furnishing <a href=\"https:\/\/corpbiz.io\/learning\/gstr-1-filings-and-voluntary-compliance\/\"><strong>GSTR \u2013 1<\/strong><\/a> at the retail outlets.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Procedure-to-Claim-Refund-GST-at-Duty-free-shops.png\" alt=\"Procedure to Claim Refund GST\" class=\"wp-image-21775\" width=\"490\" height=\"490\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Procedure-to-Claim-Refund-GST-at-Duty-free-shops.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Procedure-to-Claim-Refund-GST-at-Duty-free-shops-150x150.png 150w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Procedure-to-Claim-Refund-GST-at-Duty-free-shops-300x300.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Procedure-to-Claim-Refund-GST-at-Duty-free-shops-768x768.png 768w\" sizes=\"(max-width: 490px) 100vw, 490px\" \/><\/figure><\/div>\n\n\n\n<p><strong><em>The following procedure to claim a refund-<\/em><\/strong><\/p>\n\n\n\n<ul><li>The first step log in to <strong>GST Portal<\/strong><sup><a href=\"https:\/\/www.gst.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup>.<\/li><li>Then, Go to Service -> Return Dashboard -> File Return.<\/li><li>After this click the search button to generate the GST RFD \u2013 10B.<\/li><li>Fill all required details such as name, address, GSTIN, amount of refund claim and the tax period. The details of the supplies must be provided and its refund.<\/li><li>Fill all bank details, including the name of a bank, type of bank account, address of the bank, IFSC code, MICR code, etc. to receive the refund.<\/li><li>After that, a declaration has to be check marked and further submit after attaching a certified signatory.<\/li><li>On successful submission, the system will further generate the ARN; after that, the message of confirmation will pop up. The taxpayer can check their refund status by using the track application under the refund tabs.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Landmark Judgment on GST at Duty-Free Shops<\/h3>\n\n\n\n<p>In a matter of <strong><em>Krishna V. Union of India, the Division Bench of Hon&#8217;ble High court of Allahabad<\/em><\/strong> consist of Justice Rajnish Kumar and Justice Pankaj Kumar Jaiswal have clarified that the supply or sale of goods at the Duty-Free Shops at the departure and the arrival terminals of international airports can be considered as exported goods under customs laws in India and will be regarded as the exported goods under the <strong>GST Act. <\/strong>Hence, any purchase made from the Duty-free shops cannot be taxable, and no tax shall be levied.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Hence, it is clear that the goods can be called exported only when they cross territorial waters of any domestic country. However, they cannot be called the exported goods by just merely crossing the Custom frontier of a country. The benefit of tax exemption will only be obtained by an international tourist who is going outside India. Further, all the conditions have to be fulfilled to obtain the benefits of the GST exempt.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/gst-exemption-on-satellite-launches-for-encouraging-the-domestic-launch\/\">\nGST Exemption on Satellite launches for Encouraging the Domestic Launch\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Duty-free shops are mostly noticed at the departure area of the International airports. They are kind of retails outlets that produce the goods locally and are exempted from payment of the local taxes. In the system, one condition has to be fulfilled that such goods can be sold only to the tourists who will [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":21777,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[1314],"acf":{"service_id":"96"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":4392,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21773"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=21773"}],"version-history":[{"count":26,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21773\/revisions"}],"predecessor-version":[{"id":52901,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21773\/revisions\/52901"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/21777"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=21773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=21773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=21773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}