Is GST payable on gift card, voucher purchase? Govt clarifies
Tax (GST) regime has been a contentious issue, leading to confusion among stakeholders. With their growing popularity, it is essential to examine the GST implications associated with the supply of these vouchers and gift cards.
Definition and Nature of Vouchers under GST
Under the GST law, a voucher is defined as an instrument that creates an obligation on the seller to accept it as full or partial consideration for a supply of goods or services. For buyers registered under GST, vouchers can be considered as payment instruments used for procuring goods and/or services. The key question is whether vouchers should be classified as goods, services, or something else entirely.
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Conflicting Rulings and Clarifications on Vouchers under GST
The taxability of vouchers under GST has seen various conflicting rulings:
1. Premier Sale Promotion Private Limited (Karnataka High Court): The high court held that vouchers, being pre-paid payment instruments (PPIs), are neither goods nor services and hence, outside the levy of GST.
2. Myntra Designs (P.) Ltd. (Karnataka AAAR): This ruling followed the Karnataka High Court's view, stating that vouchers are neither goods nor services. Hence, no GST on vouchers.
3. Kalyan Jewellers India Ltd. (Tamil Nadu AAAR followed by High Court Ruling): On the contrary, the Tamil Nadu AAAR held that vouchers represent advance payment for underlying goods or services and should be taxed at the rate applicable to the underlying supply. On appeal before the High
