GST on redeemable coupon.

[DEEPAK SHARMA]

Sir,

If we do business of redeemable coupon, e.g. one is manufacturing redeemable coupon, we purchase the same and sale it to pizza hut. on which value we need to charge GST for the sake of example. we sale 100 coupons of ₹ 50, and our sale value is ₹ 200, on which value we need to charge GST,

Or

We manufacturing coupon on behalf of Pizza Hut, pizza hut ordered us to manufacture 1000 coupon of ₹ 200. whereas our price is ₹ 500. please suggest on which price we need to discharge GST.

Thanks & Regards

[Rajagopalan Ranganathan]

Sir,

You have to pay GST on the transaction value, that is, ₹ 200/- in the first case and ₹ 500 in the second case.

[DR.MARIAPPAN GOVINDARAJAN]

You have to charge on the original value of sales.

AI Summary

GST on transaction value: tax applies to the price charged between parties, not coupon face value.
GST for redeemable coupons is payable on the transaction value charged between the supplier and purchaser rather than on the coupon's face redemption value; where a reseller sells coupons for a contracted amount GST applies to that sale price, and where a manufacturer makes coupons for a client GST applies to the original price charged by the manufacturer to the client.