9911796707
TMI Blog2022 (7) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 dated 27.03.2018. The date of communication of Advance Ruling to the appellant was 10.04.2018 BRIEF FACTS OF THE CASE 3. The applicant is in the business of retail sale of sunglasses. The applicant was registered under the Delhi Value Added Tax Act, 2004 and the Central Sales Tax Act, 1956 and now the applicant has migrated' to GST regime and its present provisional GST Number is 07AADCR6468R1ZF. 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. 3.1 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 Gate 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 Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant on 08.06.2018 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." 4. The appellant filed the appeal on 08.06.2018 and case falls within the condonation period of 30 days under proviso to s100(2) of CGST Act, 2017. SUBMISSIONS OF THE APPELLANT 5. That an application under section 97(2)(e) of the DGST Act, 2017 was moved before the Authority for Advance Ruling, Delhi on the question of the above supply being ze ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act-which includes territorial waters. The Law Commission was of the view, that, the expression "customs frontiers" was given a wide meaning in the old Customs Act or in terms of the present Customs Act, 1962 - "territorial waters" have been included within India- because such a wide connotation is considered necessary for the purpose of the enforcement of the customs law, particularly for surveillance and similar purpose. But in practice, the actual checking of the goods mostly takes place not at the edge of the national territorial waters, but at a "customs station", when the goods cross the customs barrier. The Commission emphasiied that the expression 'customs station' has a statutory connotation and can be conveniently utilized and hence an amendment of section 2 of the CST Act was recommended by the 61st Law Commission and which was implemented by the legislature by incorporation of section 2(ab) in the CST Act by the CST Amendment Act of 1976. 5.3 That, the said definition of "customs frontiers of India" also finds place in section 2(4) of the IGST Act and hence there was no reason for the Authority to take a different view of the words "India" in the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recedents and judicial recommendations on the meaning of the said words. 6.2 The Impugned Ruling grossly erred in creating an artificial distinction between "India" and "customs frontiers of India" which was entirely irrelevant for the purpose of examining whether any tax is leviable on supplies made to international outbound passengers from duty free area. The definition of "Import of Goods" per Section 2(10) of the IGST Act is in para-materia with the definition of "Export of Goods" per Section 2(5) of the IGST Act though reverse in nature as far as the movement of goods are concerned. It may be noted that distinction between "India" and "custom frontier of India" has been specifically incorporated by Section 7(2) of the IGST Act in case of supply of goods imported into territory of India but no such distinction exist in relation to supply of goods exported out of India. 6.3 That, the interpretation given in the impugned ruling to the territorial extent of India being co-terminus with the territorial waters by invoking section 2(56) of the CGST Act and section 2(27) of the Customs Act is in complete ignorance to the definition of "Customs Frontiers of India" in section 2(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India'. The buyer purchases the goods for his own use on the journey of the aircraft to foreign countries and which in itself is sufficient to satisfy the definition of 'export'- taking goods out of India. 6.5 That, significance of the Appellant's retail outlet being in the Security Hold Area (which is situated beyond the Customs Frontiers of India) is evidentiary and it is a sustentative evidence that the goods supplied to an International passenger against an international boarding pass will be taken to a place outside India. The Security Hold Area at Terminal 3 -Departure (IGI) is not accessible to all and sundry and entry to the said area is strictly regulated. An international passenger enters the area for boarding an International flight and the said area is not a Shopping Mall. Thus, the location of the Appellant's outlet provides a substantive evidence for the supply being taken out of India by the passenger. The goods domestically procured on payment of CGST/SGST or IGST and supplied from the Outlet of the Appellant to international outbound passengers do not attract the levy of CGST/SGST or IGST and qualifies as export as defined under Section 2(5) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within India (though beyond the Customs Frontiers of India), thus the impugned Ruling is bad in law and liable to be set aside and decided in accordance with the definition of 'export' and the definition of "Customs Frontiers of India". That, in the alternative, the Hon'ble Authority may be pleased to pass any other order giving relief to the Appellant. DISCUSSION AND FINDINGS 7. We find that in terms of Section 100 of the CGST Act, an appeal should be filed within 30 days from the date of communication of the advance ruling order that is sought to be challenged. However, the Appellate Authority is empowered to allow the appeal to be presented within a further period not exceeding 30 days if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the initial period of 30 days. For this we need to establish when the advance ruling order No 01/DAAR/2018 dated 28.03.2018 was communicated to the appellant. Section 169 of the CGST Act prescribes the modes of service of orders. It is seen from the records available in the office of the Advance Ruling Authority that the Advance Ruling order was received by the appellant on 10.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) "taxable territory" means the territory to which the provisions of this Act apply; Section 7 7. (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; Customs Act, 1962 Section 2 (11) "customs area" means the area of a customs station or a warehouse and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities; (13) "customs station" means any customs port, customs airport, international courier terminal, foreign post office or land customs station; (19) "export goods" means any goods which are to be taken out of India to a place outside India; (20) "exporter", in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner, beneficial owner or any person holding himself out to be the exporter; (27) "India" includes the territorial waters of India; (28) "Indian customs waters" means the waters extendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant are taking place in the SHA, which falls well within the definition of 'India, as extracted herein. In light of the aforesaid finding, we conclude that the sale transactions of the appellant cannot be equated to the 'export of goods' under s2(5) of the IGST Act, 2017 read with s2(19) of the Customs Act, 1962. 9.5 The appellant has also drawn our attention to the fact that their transactions should be treated as 'zero-rated supply'. We have already held in foregoing paras that the sale transactions from the SHA to the outbound international travellers do not fall within the definition of 'export of goods'. In view of the aforesaid findings, section 16, of the IGST Act, 2017 gets ousted automatically as the said section deals with 'export of goods'. 10. Notwithstanding the aforesaid, Section 15 of the IGST Act, 2017 is applicable to tourists leaving India and any supply of goods taken out of India by him shall be refunded in the manner prescribed. As per Explanation appended to Section 15 of the IGST Act, 2017 "tourist" means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies of goods or services to or from duty free shop situated after the passenger crosses the immigration counter at arrival or departure hall of International Airport Terminals; however, they would have no application to shops located at a domestic Airport or Domestic Security Hold Area, which are before even the immigration clearance by a passenger, where the transaction cannot be said to have taken place in any area beyond the customs frontiers of India or outside India. Even otherwise, a passenger travelling on a domestic flight from Nagpur may or may not travel abroad, and the Customs Authorities would not be able to have effective check and control to verify whether the goods purchased from Domestic Airport at Nagpur are actually taken abroad by the passenger. 14. We are thus unable to agree with the petitioner and find no merit in this petition. No case is made out even on prima facie basis to issue any directions or any notice in that regard. With the above observations, the petition stands dismissed." 13. Based on the elaborate finding of ours, we hold that based on the provisions of law, as extracted herein, we hold that transactions i.e. supply of goods to outbound int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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