Circular No. 106/25/2019-GST dated 29th June, 2019 regarding Refunds by Duty Free Shops (DFS) and Duty Paid Shops (DPS) under Customs

Duty Free Shops (DFS) and Duty Paid Shops (DPS):- The international airports, house retail shops of two types–
• “Duty Free Shops‟ which are point of sale for goods sourced from a warehoused licensed under Section 58A of the Customs Act, 1962 and duty paid indigenous goods and,
• “Duty Paid Shops‟ retailing duty paid indigenous goods.
• Procurement and supply of imported/ warehoused goods: The procedure and applicable rules as specified under the Customs Act are required to be followed for procurement and supply of such goods
• Procurement of indigenous goods :- All indigenous goods would have to be procured by DFS or DPS on payment of applicable tax when procured from the domestic market.
• Supply of indigenous goods by DFS or DPS established at departure area of the international airport beyond immigration counters:
• Supply made by such retail outlets to eligible passengers has been exempted vide notification No. 11/2019 – Integrated Tax (Rate) and 01/2019-Compensation Cess (Rate) both dated 29.06.2019
• The retail outlets will supply such indigenous goods without collecting any taxes from the eligible passenger and may apply for refund of all applicable Central tax, State tax, Integrated tax, Union territory tax and Compensation cess paid by them on all inward supplies of indigenous goods received for the purposes of subsequent supply of such goods to the eligible passengers.
• Such retail outlets will not be eligible for input tax credit of taxes paid on such inward supplies and the same will have to be reversed in accordance the provisions of the CGST Act read with the rules made : thereunder.
• No refund of tax paid on input services, if any, will be granted to the retail outlets.
• Manual filing of refund claims: Till the time the online utility for filing the refund claim is made available on the common portal, these retail outlets shall apply for refund by filing an application in FORM GST RFD-10B, as inserted vide notification No. 31/2019-Central Tax dated 28.06.2019 manually to the jurisdictional proper officer.
• The scheme shall be effective from 01.07.2019 and would be applicable in respect of all supplies made to eligible passengers after the said date.
• In other words, retail outlets would be eligible to claim refund of taxes paid on inward supplies of indigenous goods received by them even prior to 01.07.2019 as long as all the conditions laid down in Rule 95A of the CGST Rules and this circular are fulfilled.
• Rule 95A has been inserted and form GST RFD-10B has also been introduced.
• The provisions of rule 92 shall, mutatis mutandis, apply for the sanction and payment of refund under this rule.

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