Levy of GST — In the instant case, Petitioner's contention is that after enactment of Central Goods and Services Tax Act, 2017 and the Rules framed thereunder, the petitioner is entitled to supply goods and services to Duty Free Shops without payment of taxes and similar supplies from all over the world except India are permitted without payment of taxes.
Held that—For the purpose of CGST Act, India extends up to the Exclusive Economic Zone up to 200 nautical miles from baseline. The location of the Duty Free Shop (DFS), whether within customs frontier or beyond, shall be within India as long as it is not beyond EEZ (200 nautical miles). Therefore, DFS cannot be said to be located outside India
As the supply to a DFS by an Indian supplier is not to 'a place outside India', therefore, such supplies do not qualify as 'export of goods' under GST. Consequently, such supplies cannot be made without payment of duty by furnishing a bond/letter of undertaking (LUT) under rule 96-A of the CGST Rules, 2017. Also, the petitioner cannot claim refund of unutilized input tax credit (ITC) under Section 54 of the CGST Act, 2017.
It is true that we cannot export our taxes but the facts remains that it is not the petitioner, who is exporting the goods or taking goods out of India. Petitioner is liable to pay GST on supply of indigenous goods to DFS.Vasu Clothing Private Limited Vs. The Union of India And Others [2018] 6 TAXLOK.COM 068 (MP)