Circular No. 106/25/2019-GST
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CBEC-20/16/04/2018-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
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New Delhi, Dated the 29th June, 2019
To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Customs (All)
The Principal Director Generals / Director Generals (All)
The Principal CCA, CBIC
Madam / Sir,
Subject: - Refund of taxes paid on inward supply of indigenous goods by retail outlets
established at departure area of the international airport beyond immigration counters
when supplied to outgoing international tourist against foreign exchange -reg.
The Government vide notification no. 11/2019-Central Tax (Rate), 10/2019-Integrated
Tax (Rate) and 11/2019-Union territory Tax (Rate) all dated 29.06.2019 issued in exercise of
powers under section 55 of the Central Goods and Services Tax Act, 2017 (hereinafter referred
to as the „CGST Act‟) has notified that the retail outlets established at departure area of the
international airport beyond immigration counters shall be entitled to claim refund of all
applicable Central tax, Integrated tax, Union territory tax and Compensation cess paid by them
on inward supplies of indigenous goods received by them for the purposes of subsequent supply
of goods to outgoing international tourists i.e. to a person not normally resident in India, who
enters India for a stay of not more than six months for legitimate non-immigrant purposes against
foreign exchange (hereinafter referred to as the “eligible passengers”). Identical notifications
have been issued by the State or Union territory Governments under the respective State Goods
and Services Tax Acts (hereinafter referred to as the “SGST Act”) or Union Territory Goods and
Circular No. 106/25/2019-GST
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Services Tax Acts (hereinafter referred to as the “UTGST Act”) also to provide for refund of
applicable State or Union territory tax.
2.
With a view to ensuring expeditious processing of refund claims, the Board, in exercise
of its powers conferred under section 168(1) of the CGST Act, hereby specifies the conditions,
manner and procedure for filing and processing of such refund claims in succeeding paras.
3.
Duty Free Shops and Duty Paid Shops: -It has been recognized that international
airports, house retail shops of two types - „Duty Free Shops‟ (hereinafter referred to as “DFS”)
which are point of sale for goods sourced from a warehoused licensed under Section 58A of the
Customs Act, 1962 (hereinafter referred to as the “Customs Act”) and duty paid indigenous
goods and „Duty Paid Shops‟ (hereinafter referred to as “DPS”) retailing duty paid indigenous
goods.
4.
Procurement and supply of imported / warehoused goods: - The procedure for
procurement of imported / warehoused goods is governed by the provisions contained in
Customs Act. The procedure and applicable rules as specified under the Customs Act are
required to be followed for procurement and supply of such goods.
5.
Procurement of indigenous goods: - Under GST regime there is no special procedure
for procurement of indigenous goods for sale by DFS or DPS. Therefore, all indigenous goods
would have to be procured by DFS or DPS on payment of applicable tax when procured from the
domestic market.
6.
Supply of indigenous goods by DFS or DPS established at departure area of the
international airport beyond immigration counters (hereinafter referred to as “the retail
outlets”) to eligible passengers: The sale of indigenous goods procured from domestic market
by retail outlets to an eligible passenger is a “supply” under GST law and is subject to levy of
Integrated tax but the same has been exempted vide notification No. 11/2019-Integrated Tax
(Rate) and 01/2019-Compensation Cess (Rate) both dated 29.06.2019. Therefore, retail outlets
will supply such indigenous goods without collecting any taxes from the eligible passenger and
may apply for refund as per procedure explained in succeeding paragraphs.
7.
Who is eligible for refund:
7.1 Registration under CGST Act: The retail outlets applying for refund shall be registered
under the provisions of section 22 of the CGST Act read with the rules made thereunder and
shall have a valid GSTIN.
Circular No. 106/25/2019-GST
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7.2 Location of retail outlets: Such retail outlets shall be established at departure area of the
international airport beyond immigration counters and shall be entitled to claim a 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.
8.
Procedure for applying for refunds:
8.1.
Maintenance of Records: The records with respect to duty paid indigenous
goods being brought to the retail outlets and their supplies to eligible passengers shall be
maintained as per Annexure A in electronic form. The data shall be kept updated, accurate and
complete at all times by such retail outlets and shall be available for inspection/verification of the
proper officer of central tax at any time. The electronic records must incorporate the feature of an
audit trail, which means a secure, computer generated, time stamped record that allows for
reconstruction of the course of events relating to the creation, modification or deletion of an
electronic record and includes actions at the record or system level, such as, attempts to access
the system or delete or modify a record.
8.2.
Invoice-based refund: It is clarified that the refund to be granted to retail outlets
is not on account of the accumulated input tax credit but is refund based on the invoices of the
inward supplies of indigenous goods received by them. As stated in para 6 above, the 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
and therefore 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. It is also clarified that no refund of tax paid on input
services, if any, will be granted to the retail outlets.
8.3.
Any supply made to an eligible passenger by the retail outlets without payment of
taxes by such retail outlets shall require the following documents / declarations:
(a) Details of the Passport (via Passport Reading Machine);
(b) Details of the Boarding Pass (via a barcode scanning reading device);
(c) A passenger declaration as per Annexure B;
(d) A copy of the invoice clearly evidencing that no tax was charged from the eligible
passenger by the retail outlet.
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8.4.
The retail outlets will be required to prominently display a notice that
international tourists are eligible for purchase of goods without payment of domestic taxes.
8.5.
Manual filing of refund claims: In terms of rule 95A of the Central Goods and
Services Tax Rules, 2017 (hereinafter referred to as the „CGST Rules‟) as inserted vide
notification No. 31/2019-Central Tax dated 28.06.2019, the retail outlets are required to apply
for refund on a monthly or quarterly basis depending upon the frequency of furnishing of return
in FORM GSTR-3B. 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 said refund application shall be accompanied
with the following documents:
(i) An undertaking by the retail outlets stating that the indigenous goods on which refund is
being claimed have been received by such retail outlets;
(ii) An undertaking by the retail outlets stating that the indigenous goods on which refund is
being claimed have been sold to eligible passengers;
(iii)Copies of the valid return furnished in FORM GSTR – 3B by the retail outlets for the
period covered in the refund claim;
(iv)Copies of FORM GSTR-2A for the period covered in the refund claim; and
(v) Copies of the attested hard copies of the invoices on which refund is claimed but which
are not reflected in FORM GSTR-2A.
9.
Processing and sanction of the refund claim :
9.1.
Upon receipt of the complete application in FORM GST RFD-10B, an
acknowledgement shall be issued manually by the proper officer within 15 days of the receipt of
application in FORM GST RFD-02. In case of any deficiencies or any additional information is
required, the same shall be communicated to the retail outlets by issuing a deficiency memo
manually in FORM GST RFD-03 by the proper officer within 15 days of the receipt of the
refund application. Only one deficiency memo should be issued against one refund application
which is complete in all respects.
9.2.
The proper officer shall validate the GSTIN details on the common portal to
ascertain whether the return in FORM GSTR- 3B has been filed by the retail outlets. The proper
officer may scrutinize the details contained in FORM RFD-10B, FORM GSTR-3B and FORM
