KOCHI: The High Court has quashed the order passed by the Assistant Commissioner of Customs rejecting Cochin International Airport Limited’s (CIAL) claim for refund of input tax. The HC decision allowed CIAL to claim refund of the entire GST amount paid by them as input tax credit (ITC).Justice Amit Rawal rendered the judgement on petitions filed by CIAL Duty Free and Retail Service Ltd, challenging the orders of rejection. CIAL contended that, since the business undertaken by them at its duty-free shops is a ‘zero-rated supply’, that is without payment of tax for export of goods, huge sums of ITC were lying unutilised with them.
The court held that the sales made to international passengers qualify as ‘exports’ and, therefore, Duty-Free Shops (DFS) shall be eligible to claim ITC of GST paid on inputs pursuant to sales to such passengers as it is a zero-rated supply. Representing CIAL, advocate Benny P Thomas, along with Harikumar G Nair and Akhil Suresh Kumar, submitted that DFSs run by the petitioner are licensed by the Jurisdictional Commissioner of Customs under Section 58 and 58A of the Customs Act, 1962.
“The products are transferred to DFSs at CIAL’s arrival and departure terminals for subsequent sales to international passengers travelling through the international terminal. Once the entire items are sold to passengers, CIAL applies for closure of bond of Bill Of Exchange with the Customs authorities. The products, which are brought from foreign suppliers and brought into India, are kept in custom bonded warehouses and are transferred to DFSs situated at the airport as and when stocks are needed,” they submitted.