GST on Gift Vouchers

[Rohit Kumar]

Good Afternoon Everyone

Let's suppose there's a company A which is in the business of providing gift cards (for eg having a monetary value of Rs 100) to various MNC's which can be used by the employees of the MNC company at any showroom.

A MNC placed an order of 1 Gift card to A and transferred an amount of Rs 100 for the same. Now A has contacted an bank and transferred this 100 to them for providing the gift card. Bank issued a gift card valued at 100 and provided the same to A, who delivered the same to MNC.

Now as every time that card is used for a purchase bank deducts a fee of around 2 percent out of which a certain amount is provided to company A, as A brought the clients to the bank.

For Every 100 Rs card, A gets around 1.15 Rs (this amount is fixed irrespective of the usage of the gift card) in their bank account as cashback.

Is GST applicable on this transaction and what is the SAC code for the same?.

[Ganeshan Kalyani]

In my view Yes it is taxable

[Shilpi Jain]

The transaction fee and the fixed fee would be liable.

AI Summary

GST on gift vouchers applies to both transaction fees and fixed cashback consideration, rendering those charges taxable. The transactional fees and the fixed cashback paid to the intermediary constitute consideration for services and are treated as taxable supplies for GST purposes; the record does not specify a Service Accounting Code for the supplies.