2021 (6) TMI 32 - HC - GST

Refund of CGST, IGST and TNGST - renting of the shops from the third and fourth respondents - passing of incidence of tax - HELD THAT - Refunds were sanctioned on the order passed by the Authority for Advance Ruling, Delhi in the case of M/s.Rod Retail Private Ltd. which was circulated by Central Board of Indirect Taxes and Customs vide a Communication dated 29.05.2018. Thus, the tax liability on account of supply of goods and service at the Airport Authority of India is revenue neutral issue in the hands of the petitioner having no implication on over all collection of tax as the petitioner is entitled for refund of input tax borne on various input / input services utilised at its Duty Free Shop located inside the Airports. Therefore, there is no useful purpose in directing the third and fourth respondents Airport Authority to pay the tax for the past period and thereafter, it is for the petitioner to file refund claims in Form GST RFD-01A as the incidence of tax that has to be passed on the petitioner is refundable to the petitioner. Since the issue is revenue neutral, there are no merits in directing the third and fourth respondents to charge the GST on the petitioner for the period between July 2019 and March 2021 and to remit the same as whatever tax is payable and chargeable and the incidence of such tax which is to be passed on the petitioner is liable to be refunded back to the petitioner. Petition disposed off.

Summary

Issues:
1. Imposition of Goods and Service Tax on Duty-Free Shops at Chennai International Airport.
2. Refund claims for wrongly collected GST.
3. Interpretation of tax liability for renting immovable property within the airport.
4. Locus standi of the petitioner in GST payment matters.

Analysis:
1. The Writ Petition was filed seeking a Mandamus to prevent the imposition of Goods and Service Tax (GST) on Arrival and Departure Duty-Free Shops at Chennai International Airport. The petitioner argued that no tax should be payable for shops within the airport premises. The dispute arose from the application of Central Goods and Service Tax Act, 2017; Integrated Goods and Service Tax Act, 2017; and Tamil Nadu Goods and Service Tax Act, 2017 to the petitioner's shops. The relief sought was a refund of wrongly collected GST amounting to ?3,31,30,829.85.

2. The petitioner had previously filed similar Writ Petitions in Kerala High Court and Madurai Bench. The Madurai High Court disposed of a related Writ Petition, indicating that the petitioner could be entitled to a refund of Input Tax Credit (ITC) and need not pay GST for a specific period. The petitioner sought a similar order for the current Writ Petition, citing that GST was charged by the respondents between July 2017 and December 2017, leading to refund claims under relevant GST laws.

3. The Court considered the tax liability issue for the renting of shops within the airport premises. The petitioner's counsel argued that since the petitioner was engaged in zero-rated supply at the Duty-Free Shops, they were eligible for refunds of input tax. The Court acknowledged the revenue-neutral nature of the issue and directed the petitioner to pay GST for specific periods and claim refunds accordingly, in line with the decision of the Madurai Bench.

4. The locus standi of the petitioner in GST payment matters was challenged by the respondents, contending that the petitioner was not responsible for GST payment on shop rentals. The Court analyzed the arguments from all parties and concluded that the petitioner, engaged in zero-rated supply, was entitled to refunds based on input tax claims. The Court directed the charging of GST for specific periods and subsequent refunds, emphasizing that the issue was revenue neutral.

In conclusion, the High Court of Madras disposed of the Writ Petition by providing specific directions regarding GST payment, refunds, and the revenue-neutral nature of the tax liability issue for Duty-Free Shops at Chennai International Airport.