In its recent order, the Kerala high court has held that duty-free shops at international airports can claim refund of accumulated input tax credit (ITC), as their sale of goods can be construed as exports under the Goods and Services Tax (GST) regime.
The high court observed that the duty-free shops at international airports are beyond the customs frontier of India. The invoices that are issued by the duty-free shops to outbound passengers, stipulate that they will not consume the goods until they land at their final destination outside India.
It noted that the Central Board of Indirect Taxes and Customs (CBIC) had chosen not to file Special Leave Petition (SLP) against a Bombay High Court order, which had earlier held the sale by duty-free shops to be in the nature of exports. Thus, the Kerala high court allowed refund of accumulated input tax credit.