GST treatment of Duty Free Shop supplies: airport sales within India are not exports and cannot be exempted by mandamus.

Under the GST regime, supplies made by an Indian supplier to Duty Free Shops at international airports are treated as supplies within India, not exports of goods, because export requires taking goods outside India to a place outside India. As a result, such supplies are not zero-rated and do not qualify for exemption from CGST or IGST or refund of input tax credit. The Court also reiterated that exemption from tax cannot be created by judicial direction where the GST statutes contain no express exemption, and that no mandamus can compel the grant of a benefit absent statutory authority.

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Issues: (i) Whether supplies made by an Indian supplier to Duty Free Shops at international airports constitute export of goods or zero-rated supply under the GST regime so as to be exempt from CGST and IGST and eligible for refund of input tax credit; (ii) Whether the Court could direct grant of exemption or issuance of a mandamus in the absence of any statutory exemption under the GST law.

Issue (i): Whether supplies made by an Indian supplier to Duty Free Shops at international airports constitute export of goods or zero-rated supply under the GST regime so as to be exempt from CGST and IGST and eligible for refund of input tax credit.

Analysis: The statutory scheme under the Integrated Goods and Services Tax Act, 2017 defines export of goods as taking goods out of India to a place outside India, while India under the Central Goods and Services Tax Act, 2017 includes the territory of India, territorial waters and the other maritime zones described in the statute. The Court held that a Duty Free Shop at an airport is still within India and that the relevant supply is made by the petitioner to a Duty Free Operator within India. The earlier customs and excise notifications operated in a different regime and no corresponding exemption existed under the GST enactments. Applying the principle of strict construction of taxing statutes, the Court held that exemption cannot be inferred by analogy or equity.

Conclusion: The supply to Duty Free Shops does not amount to export of goods under GST and is not exempt from CGST and IGST; the petitioner remains liable to pay GST on such supplies.

Issue (ii): Whether the Court could direct grant of exemption or issuance of a mandamus in the absence of any statutory exemption under the GST law.

Analysis: The Court held that taxation and exemption are matters of legislative policy and that courts cannot enact law or create an exemption where the statute does not provide one. It further held that the petitioner cannot claim an exemption as of right merely because a similar benefit existed under the pre-GST regime, and that there is no estoppel against statute. In the absence of a statutory provision authorising the claimed relief, no mandamus could be issued to compel exemption or to treat the supply as export.

Conclusion: The prayer for mandamus directing exemption or legislative intervention was rejected.

Final Conclusion: The writ petition failed on merits because supplies by an Indian manufacturer to Duty Free Shops within India are not exports under the GST law and the Court could not grant the exemption sought in the absence of statutory authority.

Ratio Decidendi: Under the GST enactments, only a supply that takes goods out of India to a place outside India qualifies as export, and in the absence of an express statutory exemption the Court cannot compel tax exemption by mandamus.

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