In exercise of the powers conferred by section 55 of the Delhi Goods and Services Tax Act,

## Policy Analysis Report: Delhi Goods and Services Tax Act Amendment - International Airport Retail Outlets **1. Executive Summary:** This report analyzes a notification issued by the Government of the National Capital Territory of Delhi, effective July 1st, 2019, pertaining to the Delhi Goods and Services Tax (DGST) Act, 2017. This notification, acting as an amendment, specifies retail outlets located in the departure area of international airports, beyond immigration counters, that make tax-free supplies to outgoing international tourists, as a class of persons entitled to claim a refund of applicable state tax paid on inward supplies of such goods, subject to conditions specified in existing rules. The likely purpose of this amendment is to incentivize international tourism and facilitate tax-free shopping for eligible tourists in designated airport retail areas. **2. Introduction:** This report aims to provide an informative overview of a notification concerning the Delhi Goods and Services Tax (DGST) Act, 2017, based solely on the text provided. This notification pertains to refunds of state tax for certain retail outlets at international airports and is analyzed as an amendment to existing rules. **3. Policy Overview:** * This notification amends the existing framework of the Delhi Goods and Services Tax Rules, 2017. * **Core Objective(s):** The core objective, as inferred from the text, is to enable retail outlets in the departure area of international airports to claim refunds on state tax paid on inward supplies, when they make tax-free supplies to outgoing international tourists. This aims to promote tax-free shopping for international tourists and possibly boost sales for these retail outlets. **4. Background and Rationale:** This notification appears to be an amendment to existing rules. The likely rationale for *this specific amendment* is to address a potential gap in the existing DGST framework regarding the treatment of tax-free supplies to international tourists at airport retail outlets. It suggests that without this amendment, these retail outlets may not have been able to claim refunds on the state tax paid on their inward supplies, potentially disincentivizing tax-free sales to tourists. This amendment seeks to rectify this by creating a specific provision for such refunds, subject to certain conditions. **5. Key Provisions / Changes:** This notification acts as an amendment. The key changes introduced are: * **Specific Part of Original Policy Changed:** This amendment introduces a new class of persons eligible for tax refunds under section 55 of the Delhi Goods and Services Tax Act, 2017 and subject to rule 95A of the Delhi Goods and Services Tax Rules, 2017. * **New Rule/Provision:** The new provision specifies that retail outlets established in the departure area of an international airport, beyond the immigration counters, that make tax-free supplies of goods to an outgoing international tourist, are entitled to claim a refund of applicable state tax paid on inward supply of such goods, subject to the conditions specified in rule 95A of the Delhi Goods and Services Tax Rules, 2017. It also provides a definition of 'outgoing international tourist' as someone not normally resident in India, who enters India for a stay of not more than six months for legitimate nonimmigrant purposes. * **Difference/Effect of the Change:** This change creates a specific pathway for the designated retail outlets to claim refunds. Before this amendment, it's likely that either no such mechanism existed, or the existing mechanism was unclear or unsuitable for this specific scenario. The effect is to potentially lower the cost of goods for these retail outlets (as they can recoup the state tax) and, by extension, allow them to offer more competitive prices to international tourists, potentially increasing sales. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders directly affected by this amendment are: * Retail outlets established in the departure area of international airports in Delhi, beyond the immigration counters. * Outgoing international tourists purchasing goods from these retail outlets. * The Delhi State Tax authorities responsible for processing and approving refund claims. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Finance Expenditure Department of the Government of the National Capital Territory of Delhi and the Lt. Governor are the responsible bodies as well as the Delhi State Tax authorities are implicitly involved in the implementation and oversight. * **Timelines/Procedures:** The notification comes into effect from July 1st, 2019. The text refers to "rule 95A of the Delhi Goods and Services Tax Rules, 2017," implying that the specific procedures and conditions for claiming refunds are detailed in that existing rule. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome *of these specific changes* introduced by the amendment text is: * Increased sales for retail outlets in international airport departure areas due to the ability to offer tax-free goods and potentially lower prices to international tourists. * Enhanced attractiveness of Delhi as a tourist destination by providing tax-free shopping opportunities for international visitors. * Increased compliance with DGST regulations among airport retail outlets. **9. Conclusion:** This notification represents an amendment to the Delhi Goods and Services Tax framework, specifically targeting retail outlets in international airport departure areas. By enabling these outlets to claim refunds on state tax paid on inward supplies for goods sold tax-free to outgoing international tourists, the amendment aims to promote tourism and boost sales for these businesses. The implementation of this amendment, in conjunction with existing rules (specifically rule 95A), will be crucial to achieving its intended outcomes.

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