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AAR ruling: GST will apply to goods carried by foreign-bound ships

Earlier, the AAR had ruled GST would be charged on goods sold at duty-free shops on the basis of inter-state provisions only

Indivjal Dhasmana  |  New Delhi 

GST

Andhra Pradesh's Authority of Advance Ruling (AAR) has said the and services tax (GST) will be levied on the supplied from Customs warehouse to merchant vessels on a foreign run, triggering sharp views from experts.

The Bench said the petitioner, Fairmacs Ship Stores, holder of a special warehouse licence, was liable to pay on outward supply made to these vessels.

The AAR treated these as inter-state supply. However, it also allowed the petitioner to collect from the clients.

Experts argue is a consumption-based tax and these supplies are consumed outside Abhishek Rastogi, partner at Khaitan & Co, says provisions on inter-state supply have been a matter of dispute.


Earlier, the AAR had ruled GST would be charged on sold at duty-free shops on the basis of inter-state provisions only.

"The constitutional validity and arbitrariness of these provisions come into play for various transactions such as duty-free shops and supplies made to the outgoing foreign vessels," Rastogi said.

The government should consider issuing a GST exemption on these supplies to mitigate additional tax costs, said Abhishek Jain, tax partner with consultant EY

First Published: Mon, June 11 2018. 07:04 IST
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