No GST on duty free rules India’s Ministry of Finance

INDIA. The Ministry of Finance has written to the Chief Commissioner of Customs insisting that Integrated Goods and Services Tax (IGST) should not be applied to purchases made in duty free shops.

The letter (obtained by The Moodie Davitt Report) relates to a recent decision by the Authority for Advance Ruling (AAR) which said IGST should be applied to sales at Rod Retail. The company runs a Sunglass Hut duty paid shop in Delhi Indira Gandhi International Airport Terminal 3. That ruling led to numerous Indian media reports claiming that duty free stores would also be hit with IGST.

Citing the ruling, Indira Gandhi International Airport’s Deputy Commissioner wrote to various duty free retailers requiring them to pay ISGT on goods sold since 1 July 2017.

The Ministry of Finance’s letter ensures that Flemingo (above) and Delhi Duty Free (below) will not have to apply ISGT

As The Moodie Davitt Report pointed out at the time, the ruling was in fact specific to Rod Retail, a point confirmed by The Ministry of Finance in its latest correspondence.

In a letter of 29 May, Ministry of Finance Department of Revenue (Central Board of Indirect Taxes & Customs) Joint Commissioner Temsunaro Jamir notes: “The issue before the AAR was relating to duty paid shops and not duty free shops. The dispensation allowed to the duty free shops is not affected in any manner.”

Jamir requested the Chief Commissioner of Customs to ensure the withdrawal of Indira Gandhi International Airport’s Deputy Commissioner’s letter to duty free retailers.



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