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?.

AI Summary

GST Applies to Gift Vouchers Issued by Companies to MNCs; Transaction and Fixed Fees Subject to Taxation A discussion on the applicability of GST on gift vouchers involves a company providing gift cards to MNCs, which are used by employees at showrooms. The company receives a fixed cashback from the bank for each card issued. Two contributors, Ganeshan Kalyani and Shilpi Jain, agree that the transaction is taxable. They mention that both the transaction fee and the fixed fee are subject to GST, but the specific SAC code was not provided in the responses.