Report No. 61
8.7. Section 5-Meaning of 'export'.-
The word, 'export', which is one of the crucial words in section 5, has created some problems. It has been held1, that in the context and setting in which the expression 'export out of the territory of India' occurs in Part XVIII of the Constitution, it is not sufficient that the goods were merely moved out of the territory of India, but that it is further necessary that the goods should be intended to be transported to a destination beyond India, so that they were in the course of 'import' into some other locality outside India. In other words, the concept of export, according to this view, postulates also the concept of 'import'. There should be two territories; and there is no 'export' of goods if the goods are intended to be taken out of the country without any intention of their being landed in specie in some foreign port. Now, it has been stated2 that this interpretation results in the levy of local sales tax on sales of coal, aviation fuel and other supplies to ships or airlines involved in international carriage.
1. See Supreme Court cases cited in para. 8.8, infra.
2. Notes in the Ministry of Finance.