Whether cash gift cards are vouchers or goods or services in GST

[ROHIT GOEL]

One of our client is dealing in sale and purchase of prepaid cash gift cards against which assessee has earned commission on which applicable GST has been paid. However no GST has been paid on value contained in such card being transaction in money and same logic has been supported by AAAR of Tamil Nadu State in the case of Kalyan Jewellers India wherein it was held that these vouchers are neither goods nor services and GST will be paid at the time of redemption of such vouchers on underlying goods or services.

Further AAR of Karnataka in the case of Premier sales promotion pvt ltd. has taken adverse view and held that gift vouchers are treated as goods and thus liable to GST @18%. Now following questions arises in respect of the above matter

1. Whether these will be categorized as goods or services or vouchers

2. Whether GST will be applicable on sale of these cards and if yes please quote HSN and tax rate

3. Whether s. 194Q and 206C will be applicable on sale and purchase of these cards

AI Summary

GST treatment of prepaid gift cards is disputed; taxability hinges on whether vouchers are goods or money and timing of supply.
The GST treatment of prepaid cash gift cards is disputed: one authority treats such instruments as vouchers not taxable until redemption, while another treats supplied vouchers as goods taxable on supply; commissions or facilitation fees are consistently regarded as taxable services, and time-of-supply consequences depend on whether the supplier is the voucher issuer or a reseller.