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appi-8/19 oocj : wp 1511/19 & 1535/19

(ii) Sales by DFSs to arriving passengers.

(iii) Receipt of input services by DFSs.

(d) The words "import" and "export" are defined in the Customs Act, 1962. These words are identically defined in the Integrated Goods and Services Tax Act, 2017 (for short, "the CGST Act").

(e) DFSs are located in customs station as defined in section 2(13) of the Customs Act, 1962. The Petitioner - DFS has been issued a special warehouse licence under section 58A of the Customs Act. Both DFS and special warehouse are part of the 'customs area' as defined in the Customs Act. The special warehouse, wherein the warehoused goods are stored before its sale from the DFS is unique and different from the other normal warehouses wherein other importers store their goods. It is for this reason that the special warehouse license is granted to the Petitioner under section 58A of the Customs Act, which is unique to the DFS business in India.

15. There is no merit in the submission of the Respondents that although the Customs Act treats the sale at appi-8/19 oocj : wp 1511/19 & 1535/19 DFS as export, the same cannot be ipso facto applicable under the GST Laws. Paragraph 4 of Circular No. 106/245/2019-GST dated 29th June 2019 issued by the Central Board of Indirect Taxes and Customs...................... GST Policy Wing of ministry of Finance, Government of India clearly shows that since the procedure for procurement of imported/warehoused goods is governed by the 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. Under Section 2(4) of IGST Act, "the customs frontier" means the limits of customs area as defined in Section 2 of the Customs Act, 1962. The DFS located in the customs airports and special warehouse will thus form part of the customs area as defined under section 2(11) of the Customs Act.

26. We find sufficient merit in the submissions of the petitioner that import of goods in terms of section 2(10) of the IGST Act means bringing the goods into India from a place outside India. As per Section 7(2) of the IGST Act, goods imported into the territory of India, till such time it crosses the customs frontier of India, shall be treated to be a supply of goods in the course of inter-State trade and commerce. As per Section 2(4) of the IGST Act, the customs frontier of India means the limits of a customs area as defined in section 2 of the Customs Act. The duty free warehouse and DFS of the petitioner are only within the limits of the customs area and therefore, the goods lying therein do not cross the customs frontier and consequently, the importation will continue to be only in the state of inter-State trade and commerce in terms of Section 7(2).