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.

Circular No.: 106/25/2019-GST
Date of Circular: 29th June 2019
Relevant Sections and Rules:

• CGST Act, 2017:
  • Section 55: Refund for specified persons
  • Section 168(1): Power to issue instructions
• CGST Rules, 2017:
  • Rule 95A: Refund to retail outlets at international departure areas
• Notifications Referenced:
  • Notification Nos. 11/2019-CT(R), 10/2019-IGST(R), and 11/2019-UTGST(R), all dated 29.06.2019

Summary of Circular:

This circular prescribes the refund procedure for retail outlets at international departure terminals, situated beyond immigration counters, on taxes paid on inward indigenous goods supplied to outgoing international tourists.

1. Scope of Refund:

Retail outlets (Duty Paid Shops or Duty-Free Shops) located in departure areas beyond immigration counters are entitled to claim refund of CGST, SGST/UTGST, IGST, and Compensation Cess paid on inward supplies of indigenous goods, when sold to:

• Eligible passengers, i.e., international tourists
• Visiting India for less than 6 months
• On legitimate non-immigrant purposes, paying in foreign exchange

2. Key Conditions:

• Retail outlet must be registered under GST
• Must be located beyond immigration counter at international airport
• Supplies made to eligible passengers are exempt under Notification No. 11/2019-IGST(R), and hence, retailers must not charge any tax

3. Refund Filing Process:

• Refund is invoice-based, not on account of accumulated ITC
• ITC on input services is not eligible for refund
• Manual application in FORM GST RFD-10B (till portal utility is enabled)
• Must include:
  • Undertakings for receipt and supply of goods
  • GSTR-3B, GSTR-2A, and non-reflected invoices
• No ITC is allowed, and it must be reversed

4. Documentation for Supply:

Each tax-free sale to a tourist must have:

• Passport and boarding pass scanned digitally
• Passenger declaration (Annexure B)
• Invoice showing zero tax
• Visible signage that goods are tax-free for international passengers

5. Refund Processing:

• Acknowledgement (FORM RFD-02) and deficiency memo (if any) within 15 days
• Sanction via FORM RFD-06 and payment advice in FORM RFD-05
• Refund paid by:
  • Centre for CGST, IGST, Compensation Cess
  • State/UT for SGST/UTGST
• Cross-sharing of refund orders mandatory within 7 days

6. Retrospective Eligibility:

Retailers can claim refund for goods received before 01.07.2019, provided sales to eligible passengers occur after 01.07.2019.

Source: Circular No.: 106/25/2019-GST