GST ON TRADING OF VOUCHERS (WHERE SUPPLY IS NOT IDENTIFIABLE AT THE TIME OF SALE OF VOUCHERS)

[ajay chharia]

GST ON TRADING OF VOUCHERS (WHERE SUPPLY IS NOT IDENTIFIABLE AT THE TIME OF SALE OF VOUCHERS)

M/s XYZ Ltd. (Company) is online traders of various good have its own online portal. The company sold only its own goods. In addition to goods the Company also sold the vouchers (where supply is not identifiable at the time of sale of vouchers), which used at specific merchant location (for exp. Amazon) for purchases of goods or services but not for cash withdrawal. Merchant duly charged the CGST/SGST/IGST on its supply and reduce voucher amount from the final invoice amount.

The company purchase the vouchers (on which supply is not identifiable) from another company having face value of ₹ 1,000/- at ₹ 950/- and sold the same online to its customer @ ₹ 975 to 1,000/- through its own portal.

The Seller selling these vouchers to the company is not charging any GST on these voucher Sales.

My queries are: -

1. Whether the sale of Vouchers (Supply is not identifiable) to customer is treated as supply of goods or supply of services as defined under the provision of the CGST/SGST Acts,

2. IF Yes, what is time of supply, warranting tax liability,

3. IF Yes, what is the HSN/SAC Code with Rate of Tax,

4. IF No, GST collection at the time of redemption of voucher by the merchant will be sufficient compliance of the provision of CGST Act,

5. IF No, whether margin earn by the company is taxable,

6. IF margin is taxable, then under which HSN/SAC Code and at What Rate.

7. Whether the company book the sale/Purchases of the Voucher in his Profit and Loss Account Separately or only differential margin as its Income.

Note:- As per section 12(4) of the CGST Act, 2017 time of supply of voucher , is date of redemption where the supply is not identifiable.

AI Summary

Time of supply of vouchers: taxation arises at redemption, affecting traders of non identifiable vouchers and margin taxation.
Whether sale of vouchers with unidentified underlying supply is taxable and when tax arises are central. Section 12(4) provides that where supply is not identifiable the time of supply is the date of redemption. Commentators differ on characterisation-virtual vouchers as services versus vouchers as goods-and on classification and rate. Practical issues include merchant redemption compliance, upstream suppliers not charging tax, and whether a trader's resale margin is taxable; trading alone does not remove GST coverage under the statutory time of supply mechanism.