Advance Ruling on GST for Duty-Free Supplies Dismissed After Withdrawal

In re Cial Dutyfree And Retail Services Limited (GST AAR Kerala)

Summary: The applicant, a company operating duty-free shops inside Cochin International Airport, sought an advance ruling regarding the applicability of GST on various transactions related to its duty-free operations. The duty-free shops sell products such as alcohol, cigarettes, perfumes, confectionary, and cosmetics to international passengers arriving from or travelling to destinations outside India. The applicant raised four key questions: whether GST is payable on supplies received by the duty-free shop from taxable suppliers; whether GST applies to goods or services supplied by the airport operator and other suppliers; whether such supplies qualify as exports, allowing suppliers to issue invoices under LUT or claim refund of IGST; and whether the duty-free shop would be eligible for a refund if it were held liable to pay GST on inward supplies.

A personal hearing was scheduled for 02/04/2025 following a notice issued on 26/03/2025. However, before the hearing, the applicant requested withdrawal of the application through an email dated 31/03/2025, seeking cancellation of the advance ruling application filed earlier.

Considering the request, the Authority for Advance Ruling, Kerala, dismissed the application as withdrawn.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KERALA

1. M/ s. CIAL Duty Free and Retail Services Ltd.(CDRSL), XI/ 318E , Cochin In­ternational Airport Building, Kochi Airport. P.O., Ernakulam, Kerala-683111 (herein after referred to as the applicant) is a company engaged in the business of operating Duty-Free Shops(DFS) inside the Cochin International Airport, Nedumbasserry, Ernakulam. The products sold at the DFS are alcohol, cigarettes, perfumes, confectionary cosmetics etc. to the International passengers who travel to or arrive from an International destination. The duty-free shops are set up inside the arrival and departure terminals for international passengers.

2. The applicant requested advance ruling on the following:

1. Since the DFS of CDRSL is located outside the customs frontiers of India as held by the Hon’ble Supreme Court, whether the DFS is liable to pay GST on the supplies received from suppliers making taxable supply to DFS?

2. Since the DFS of CDRSL is located outside the customs frontiers of India as held by the Hon. Supreme Court, whether any GST can be levied on goods or services supplied/rendered to the DFS by CIAL and other suppliers of taxable supplies?

3. If the goods or services supplied to the DFS by CIAL and other vendors are liable for GST, then whether the goods and services supplied to DFS are export of goods or services wherein the CIAL /other vendors would be eligible to either raise the invoice under LUT or claim refund after discharging the IGST liability, being transactions in the course of export of Goods or Services ?

4. If for any reason, CDRSL is held liable to GST on supplies received, whether DFS is eligible for refund of such tax paid in respect of inward supply of goods or services, as held by the Hon’ble Supreme Court?

3. The applicant was granted an opportunity for personal hearing on 02/04/2025 by issuing a hearing notice dated 26/03/2025. However the applicant by e-mail dated 31/03/2025 requested the Advance Ruling Authority to permit them to cancel the application submitted as per ARN AD3207230027110 dated 14-07-2023 for Advance Ruling regarding GST liability.

4. In view of the above, the following ruling is issued;

RULING

The application is dismissed as withdrawn.