Vouchers are taxable goods under CGST Act 2017; 18% GST rate applies

The ruling determined that the supply of vouchers, including Gift Vouchers, Cash Back Vouchers, and Multiple Options Vouchers, constitutes a taxable supply of goods under Section 7(1)(a) of the CGST Act 2017. The vouchers are considered goods and subject to an 18% GST rate as per Entry No. 453 of Schedule 3 of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. The time of supply for all three categories of vouchers is based on the date of issue, as the specific use and redemption date are not identifiable at the time of supply.

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Issues Involved:
1. Taxability of vouchers and the stage at which they are taxable for three categories of transactions.
2. Applicable rate of tax for the vouchers.

Issue-wise Detailed Analysis:

1. Taxability of Vouchers and Stage of Taxability:

The applicant, a Private Limited Company engaged in providing Marketing Services, sought an advance ruling on whether the supply of vouchers is taxable and the stage at which they become taxable for three categories of transactions: Gift Vouchers, Cash Back Vouchers, and Multiple Options Vouchers.

a. Supply of Gift Vouchers:
The applicant purchases vouchers from third parties (e.g., Amazon) and supplies them to customers (e.g., HSBC). These vouchers are then issued by the customers to their clients, who redeem them for goods or services from the issuing company. The transaction involves the applicant trading in vouchers, negotiating prices, and selling the vouchers to clients.

b. Supply of Cash Back Vouchers:
The applicant supplies vouchers to vendors, who distribute them to their customers. The customers redeem these vouchers for cashback in their e-wallets, which they use to purchase goods from the vendors. The redemption occurs when the cashback is credited to the e-wallet.

c. Supply of Multiple Options Vouchers:
The applicant supplies vouchers to vendors, who issue them to their customers. These vouchers can be used to pay for various goods or services from suppliers tied up with the applicant. The suppliers settle the vouchers with the applicant.

The ruling determined that the supply of these vouchers constitutes a taxable supply of goods under Section 7(1)(a) of the CGST Act 2017. The vouchers, whether tangible or intangible, are considered goods as they are movable property capable of being transmitted, transferred, delivered, stored, and possessed.

2. Applicable Rate of Tax:

The ruling examined whether the vouchers fall under the definition of "money" or "actionable claims." The definition of "money" under Section 2(75) of the CGST Act 2017 was considered, but it was concluded that the vouchers do not obtain the character of money at the time of their supply by the applicant. They are recognized as money only when used as consideration for the supply of goods or services by the end user.

The vouchers were also examined under the definition of "actionable claims" under Section 2(1) of the CGST Act 2017 and Section 3 of the Transfer of Property Act, 1882. The ruling concluded that the vouchers do not qualify as actionable claims as they are not debts and have an expiry period.

The ruling determined that the supply of vouchers is taxable as goods, and the applicable rate of tax is 18% GST as per Entry No. 453 of Schedule 3 of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. The face value of the vouchers is considered for the purpose of paying GST.

Time of Supply:

The time of supply for the vouchers is governed by Section 12(5) of the CGST Act 2017, which states:
- The date of issue of the voucher if the supply is identifiable at that point.
- The date of redemption of the voucher in all other cases.

For all three categories of vouchers (Gift Vouchers, Cash Back Vouchers, and Multiple Options Vouchers), the time of supply is determined by the date of issue of the voucher, as the specific use and redemption date are not identifiable at the time of supply.

Ruling:

1. The supply of vouchers is taxable as goods, and the time of supply for all three categories is governed by Section 12(5) of the CGST Act 2017.
2. The applicable rate of tax for the vouchers is 18% GST as per Entry No. 453 of Schedule 3 of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

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