Kerala HC in the case of Cial Duty-Free And Retail Services Ltd
Cial Duty-Free And Retail Services Ltd
Union of India
Facts of the Case:
In writ petition bearing W.P.(C) Nos.6850 of 2018, a declaration has been sought to the effect that the Central Goods and Service Tax Act, 2017, the Integrated Goods and Service Tax Act, 2017, and the Kerala State Goods and Service Tax Act, 2017 and the rules thereunder do not apply to the supply of goods and services effected by the petitioner in the arrival and departure Duty-Free Shops (hereinafter called as ‘DFSs’) at Calicut International Airport in terms of the Concession Agreement dated 22.04.2016 with a further prayer of issuance of direction to the respondents not to apply the aforementioned Acts to the DFS operated by the petitioner and to quash Exhibits P-3 & P-10 to the extent of levying CGST and IGST on the revenue sharing in terms of the Concession Agreement dated 22.04.2016.
In writ petition bearing W.P.(C) No.13237 of 2020, the petitioner has sought to quash of orders (Exhibits P-17 and P-20) whereby refund already ordered has been rejected by the respondents.
Observations of the Court:
In my view, if the transaction of sale or purchase takes place when the goods are imported in India or they are being exported from India, no State can impose any tax thereon. It is also not in dispute that all the DFSs are situated at international airports i.e. at Cochin and Calicut, which are beyond the customs frontiers of India and would not be within the customs frontiers of India. When any transaction takes place outside the customs frontiers of India, of course, the transaction is said to have taken place outside India, though the transaction might take place within India. Examining the provisions of Section 2(11) of the Act of 1962 read with Section 286 of the Constitution of India, the said transaction would be said to have taken place outside India.
The Decision of the Court:
In view of what has been noticed above, the impugned orders in all the writ petitions are set aside and accordingly allowed.
In W.P.(C) No.6850 of 2018, I refrain myself from giving any declaration as sought qua accessibility of GST at Calicut International Airport but since this Court had granted the stay, which is operational during the pendency of the present writ petition, no GST is payable by respondent No.4 Airport Authority and no useful purpose would be served in directing respondents No.1 to 3 to recover any GST on concession fee till 30.06.2020, which respondent No.4 will seek to recover from the petitioner since as per judgment dated 07.10.2019, the supply of goods by DFSs to outgoing passengers is export of goods under IGST and zero-rated supply, it would entitle the petitioner(s) to claim 100% of ITC and refund thereof effective from 01.07.2020 onwards. As per the reasoning assigned in para 37 of the judgment referred to above in Sandeep Patil, the petitioner shall pay the GST on input services including Concession Fee to respondent No.4 and claim ITC of the entire tax amount and thereafter claim a refund of the same by following the procedure prescribed under Section 54(3) of the Central Goods and Services Tax Act, 2017 and Kerala Goods and Services Tax Act, 2017 read with Rule 89 of Central Goods and Services Tax Rules, 2017 and Kerala Goods and Services Tax Rules, 2017.
Consequently, the writ petitions are allowed in the above terms.