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supply of goods to the International passengers going abroad by the applicant from their retail outlet situated in the Security Hold Area of Airport cannot be called "export" under Section 2(5) of the IGST Act, 2017

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Advance Ruling — Sec. 2(5) of the IGST Act, 2017 — Export — The applicant has several retail outlets in Delhi and one such outlet is at Terminal 3 (International Departure), Indira Gandhi International Airport, New Delhi. The present application relates to the question arising from the transaction conducted from the said outlet. As a standard rule, every International Airport has a "Landside" and an "Airside". The Landside area comprises of Check in counters and Baggage Drops and Airside area has aircrafts for boarding. A passenger crosses over from Landside to Airside by passing through Customs & Immigration area and then through security on to the Boarding Gates for departure. The applicant's concerned retail outlet is in the Security Hold Area on crossing the Customs & Immigrations with the address - Shop No. INS-18, SHA Area, International Departure, Terminal 3, IGI Airport, New Delhi-110037. The said outlet is permitted to function beyond the Customs Area and within the Security Hold Area of the IGI Airport vide an arrangement with the Delhi International Airport Private Limited, dated 06.06.2016. The Concept and Category of the applicant under the said agreement being Retail and Sunglasses and the brand- "Sunglass Hut", which is a retail brand of the International group Luxottica. For the purposes of sale from the said outlet, the applicant procures supplies from the Sunglass Hut brand owner M/s Luxottica India Private Limited, Gurgaon, after payment of Integrated Tax (Inter-State Supply form Gurgaon to Delhi) @ 28% The sunglasses procured from the supplier are further supplied by the applicant to the International passengers travelling to outside India against a valid international boarding pass. The applicant supplies goods only to such passengers which have a valid international boarding pass. In few instances, where domestic passengers are travelling to a domestic destination on a transit International flight, no supply to such passengers holding a domestic boarding pass is made by the applicant.  Presently, the applicant is charging SGST/CGST on the supply invoice issued to the International passengers. However, the applicant is of the view that, its supply of goods to international passengers is a zero rated transaction, being 'export sale' within the meaning of the same under Section 2(5) of the IGST Act. The issue is whether the location of the retail outlet of the applicant in the Security Hold Area of the International departure is outside India though geographically it is within the territory of India. The said area is after crossing the Customs Frontier of India and is claimed to be situated outside the territory of India. Authority for Advance Ruling, New Delhi held that:—It is held that the supply of goods to the International passengers going abroad by the applicant from their retail outlet situated in the Security Hold Area of the Terminal-3 of IGI Airport, New Delhi may be taking place beyond Customs Frontiers of India as defined under Section 2(4) of the IGST Act, 2017. However, the said outlet is not outside India, as claimed by the applicant but the same is within the territory of India as defined under Section 2(56) of the CGST Act, 2017 and Section 2(27) of the Customs Act, 1962 and hence the applicant is not taking goods out of India and hence their supply cannot be called "export" under Section 2(5) of the IGST Act, 2017 or "zero rated supply" under Section 2(23) and Section 16(1) of the IGST Act, 2017. Accordingly, the applicant is required to pay GST at the applicable rates.[2018] 50 TUD 176 (AAR-NEW DELHI)