“Duty free” is just a tag

about 2 years ago
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When you go and shop at the international airports in India, one big lure is the tag of “duty free.” That’s how it is world over. But looks like India has these tag just for namesake.

Next time you buy anything from an international airport, be ready to shell out GST. Yes, the Govt has imposed GST on everything and anything that you buy at the international airports. This is at least applicable as of now when you fly out of Delhi international airport.

These shops were duty free – in pre-GST time, there was no central sales tax and no VAT as sale from such shops were considered as exports and supplies were taking place beyond the ‘customs frontiers’ of India.

But an application was filed by   Rod Retail Private Ltd. which runs a retail outlet at Terminal 3 (International Departure), Delhi. In response to this, the Authority for Advance Ruling (AAR) ruled that the supply of goods to the international passengers going abroad from ‘duty free’ shops may be taking place beyond the customs frontiers of India under Integrated GST Act, but the said shops are within the territory of India under the Central GST Act. Thus shopkeepers need to pay tax and when they need to pay GST, naturally, they will pass it on all to us.

Seriously, this makes “duty free” shopping so irrelevant and most certainly a blow to the shops – why would one want to buy there when you could get the same thing outside, sometimes maybe at a cheaper rate?

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