Tax-free Shopping in UK
IF you are from India (or for that matter from any country other than European Union) and if you shop in UK, you are entitled for VAT free shopping or refund of VAT, provided you take those things you buy, back to Your country.
There are certain shops that offer tax-free shopping. You have to show your passport at the shop and the assistant will help you fill in a form and will tell you how you will get your tax back. You should not use the things you buy till you leave UK - no, not even perfumes.
At the port or airport, your form has to be stamped by the Customs. At Heathrow airport there is a refund office and you may get your refund even before you board your aircraft.
But, remember when you land in India, you have to declare all the tax-free goodies you bought in London, to the Indian Customs and pay the Indian Customs duty, if the value is beyond the exemption limit. Don't ever try to dodge the Indian Customs - they have information on what you bought and how much refund you got at Heathrow airport!.