2021 (3) TMI 1028 - HC - GST

Levy of CGST IGST and TNGST - duty free shops in the various airports - concession fees paid by the petitioner to the airport authority under the petition mentioned agreement - HELD THAT - The Hon ble Bombay High Court in SANDEEP PATIL FLEMINGO TRAVEL RETAIL LIMITED ANR. VERSUS UNION OF INDIA AND OTHERS. 2019 (10) TMI 360 - BOMBAY HIGH COURT held that since the duty free shop is located outside the customs frontier of India it would be entitled to refund of ITC on the GST first paid by them. The department originally wanted to question the said decision before the apex court. But then the central government declined to grant permission - The said decision was followed by the Hon ble Kerala High Court in Flemingo Dutyfree Shop Private Limited vs. Union of India 2020 (9) TMI 981 - KERALA HIGH COURT . The very same approach can be adopted in the case on hand also. Of course a slight tweaking will be required. This is because the fourth respondent had paid GST to the first respondent for the period from 01.01.2018 to 31.03.2018 - In as much as the petitioner would be entitled to refund of ITC on the GST paid by them I am of the view that no purpose will be served by asking the petitioner to pay GST and thereafter claim refund. Therefore for the period prior to 28.02.2021 the petitioner need not pay any GST to the fourth respondent - Since the fourth has paid GST for the period from 01.01.2018 to 31.03.2018 even though the petitioner has not paid the first respondent has to refund to the fourth respondent - The petitioner has to pay GST on the concession fee to the fourth respondent and thereafter claim refund as per Section 54 of the CGST Act with effect from 01.03.2021. Petition disposed off.

Summary

Issues:
Applicability of Central Goods and Service Tax Act, 2017, Integrated Goods and Service Tax Act, 2017, and Tamil Nadu Goods and Service Tax Act, 2017 on concession fees paid by a company operating duty free shops at Trichy International Airport.

Analysis:
The petitioner, a company operating duty free shops, raised a question regarding the applicability of GST Acts on concession fees paid to the airport authority. An interim injunction was granted in February 2018, restraining the airport authority from collecting GST. The petitioner had initially paid both concession fees and GST but stopped paying GST post the interim order. A similar issue was considered by the Bombay High Court and Kerala High Court, where it was held that duty-free shops are entitled to refund of Input Tax Credit (ITC) on GST paid. The Kerala High Court specified the procedure for claiming ITC and refund under the GST Acts.

The Madras High Court, following the approach of the Kerala High Court, ruled that the petitioner need not pay GST for the period before February 28, 2021, as they are entitled to refund of ITC. However, the petitioner must pay GST on concession fees from March 1, 2021, and claim a refund as per Section 54 of the CGST Act. The court also directed the refund of GST paid by the airport authority for the period when the petitioner did not pay, emphasizing the entitlement to ITC and refund as per the GST laws.

In conclusion, the judgment clarified the petitioner's obligations regarding GST payment on concession fees, emphasizing the entitlement to claim ITC and refunds under the GST Acts. The court's decision aligned with previous rulings on duty-free shops' eligibility for ITC refund, providing a structured approach for GST compliance and refund procedures in such cases.