Gift vouchers, cash-back vouchers given to consumers or suppliers will be treated as goods or goods and will attract Goods and Services Tax (GST) at the rate of 18 per cent.
New Delhi: Gift vouchers, cash-back vouchers given to consumers or suppliers will be treated as goods or goods and will attract Goods and Services Tax (GST) at the rate of 18 per cent. Advance Decision Authority (AAR) has given this arrangement. Bengaluru-based Premier Sales Promotion Pvt Ltd filed an appeal before the Karnataka Bench of AAR asking whether the GST rate would be applicable on supply of gift vouchers, cash-back vouchers or e-vouchers with multiple options. Also Read: How to Open Your Fixed Deposit Account Online in SBI Bank, Learn Step-by-Step Method
The applicant carries on the business of vouchers to further the business. With respect to gift vouchers, the AAR stated that the applicant buys the voucher and sells it to his customers, who further distribute the same to his customers. At the same time, customers make their payment commitment at the time of purchase of goods and services from the supplier through these vouchers. As such, these gift vouchers do not constitute ‘currency’ at the time of their supply to the applicant. Also Read: SBI Customers: It is necessary to link Aadhar with PAN by 30th September, check whether or not
As regards cash-back or multiple choice e-vouchers, AAR has concluded that these vouchers cannot be treated under the definition of ‘currency’ at the time of supply, but at the time of making payment for any goods or services. They take the ‘form’ of money. The AAR ruled that the supply of vouchers is taxable like goods and would attract 18 per cent GST. Also Read: Good News Farmer Customers: Now you will be able to see your Kisan Credit Card Account online on YONO, see how here
AMRG & Associates Senior Partner Rajat Mohan said that the AAR has provided that the supply of e-vouchers will attract 18 per cent tax like commodities. In this it will not be seen what goods have been purchased from such vouchers. Further, the AAR has struck down the special provisions relating to timing of supply-related vouchers mentioned in the GST rules. “With this decision all e-vouchers will be taxed at 18 per cent.” Also Read: Baal Aadhaar: Things to keep in mind while enrolling children, you should also know
