INDIA. In a key development for Indian travel retail, the Allahabad High Court this month ruled that goods & servces tax (GST) should not be levied on duty free purchases made at Chaudhary Charan Singh International Airport in Lucknow.
“This is a landmark judgement,” one of India’s senior travel retail executives told The Moodie Davitt Report today.
High Court judges Pankaj Kumar Jaiswal and Rajnish Kumar ruled that GST should not be applied as the goods never cross the customs border. Moreover, passengers carry these items as their personal effects. “We find that exemption under GST on goods supplied to and from DFS is rightly conferred,” they said in a written judgement.
The judges rejected petitioner Atin Kishna’s claim that the public exchequer was suffering severe financial loss as a result of GST not being applied to purchases at the Lucknow stores. Flemingo runs the departures and arrivals duty free shops at the airport on a seven-year concession that began in 2016.
The application of GST to duty free purchases has been a contentious one in India over recent years. The Lucknow judgement mirrors one made in 2009, again in favour of Flemingo, in the Karnataka High Court. In that case the judges ruled that goods sold to arriving, departing or transit passengers were “a distinct and separate type of transactions” from local markets.
