Madras HC Upholds GST Exemption on Revenue Share for Duty-Free Shops at Airport as Zero-Rated Supply

The Madras High Court has upheld a GST exemption on the revenue share received by the Airports Authority of India (AAI) from duty-free shops operating at airports. The court ruled that this income should be treated as part of a "zero-rated supply." The dispute arose because the AAI was receiving a share of the revenue from the duty-free shops, which sell goods to international passengers. The High Court reasoned that since the duty-free shops themselves are making zero-rated supplies (i.e., exports), the consideration for the space and facility provided to them, which is in the form of a revenue share, is also intrinsically linked to this zero-rated activity. Therefore, the court concluded that this revenue share income is not liable for GST. This is a significant ruling that provides clarity on the GST treatment of commercial arrangements within international airport terminals.