Union of India Vs Flemingo Duty Free Shop Private Limited (Madras High Court)
Madras HC directs to examine revenue neutrality for payment of CGST/SGST on minimum guarantee on Duty Free Shops
Madras High Court directed authorities to examine as to whether the tax effect is in fact revenue neutral for the period prior 01.04.2021 or there is any loss of revenue with regard to payment of CGST/SGST on the minimum guarantee/ revenue share with regard to duty free shops.
Facts- Petitioner viz., Flemingo Duty Free Shop Private Limited, is a company incorporated under Companies Act, 1956. Respondent No.3 Airport authority of India is a Public Sector Enterprise and responsible for operation, management and maintenance of airports in India.
Petitioner entered into a concession agreement with 3rd respondent for operation of DFS at Chennai International Airport. Petitioner was issued a Special Bonded Warehouse License u/s. 58A of the Customs Act, 1962, by the Commissioner of Customs for storage of Duty Free Goods. Petitioner has been running DFS since 2016 and sells perfumes, alcohol, confectionery, cosmetics etc. These products are procured by petitioner from foreign suppliers for sale at DFS inside the airport. These are first kept in customs bonded warehouses and later transferred to DFS for sale. In terms of the concession agreement petitioner paid minimum guarantee/revenue share to respondent No.3 and 4, at both arrival and departure outlets. Writ petitions were filed challenging the levy of CGST/SGST on the minimum guarantee/revenue share on DFS operated by petitioner in the arrival and departure terminals.
