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Sale of goods from Duty Free shops located at International Airports constitutes ‘export of goods’

October 10, 2019[2019] 110 taxmann.com 155 (Bombay)
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GST: Supply by Duty Free Shops of petitioner at international Airport to outbound passenger constitutes exports by DFS. Consequently, in terms of section 16(1) of IGST Act, 2017, it becomes a zero rate supply. Further, as per article 286 of the Constitution of India, supply made in course of import into India or in course of export out of India, can not be subjected to any tax

• Needless to say that if the duty free shop, which caters to the outgoing or incoming international passengers, is subjected to local taxes by the State, the tax burden will increase and the price of the goods, which are supposed to be free of taxes and duties, will go up, and the same would prevent the duty free shops in India from competing with DFSs at international airports elsewhere in the world. This will also hamper and prejudicially affect foreign trade, and augmentation and conservation of foreign exchange and will also negate the intent and purpose of article 286 of the Constitution of India.

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