GST obligation on reward points received.

[Nikhil Kamble]

One of the Company has a entry in 26AS which reflects one of the oil companies has deducted TDS u/s 194R of Income Tax Act (Reward points if you use your fuel card above specific limit. Is GST applicable on the same and how to treat it in GST return.

[KASTURI SETHI]

Such reward points can be termed as incentive which is equal to discount. Not taxable. For more information on this issue see Board's Circular No. 251/08/2025-GST dated 12.09.2025.

[Sadanand Bulbule]

While welcoming reply of Sir, I add the following:

The receipt of reward points on achieving the prescribed fuel card usage threshold, notwithstanding deduction of TDS under Section 194R of the Income-tax Act, does not by itself constitute a taxable supply under the GST law. So in the absence of any independent obligation to provide a service to the oil company, it is not liable to GST or reportable as an outward supply in GST return

[KASTURI SETHI]

Dear Sir,

Thank you very much for providing finishing touch.

[Shilpi Jain]

Being in the nature of discount, no GST liability. One should note that any inflow of money or every entry in 26AS should not be regarded as a taxable income more so in the absence of a supply.

[KASTURI SETHI]

Form 26AS cannot be sole basis for SCN----------Allahabad High Court in the case of Nimeshbhai Gunvantbhai Patel reported as 2024 (11) TMI 669 - GUJARAT HIGH COURT.

Order dated 22.10.2024.

AI Summary

Reward points as fuel-card discounts are not taxable under GST absent an independent supply obligation to the issuer.
Reward points received on meeting a fuel-card usage threshold are treated as an incentive or discount rather than consideration for a taxable supply. A tax deduction at source entry or Form 26AS entry does not by itself create GST liability. Unless the recipient is independently obliged to provide goods or services to the oil company in exchange for the points, no GST is payable and the points need not be reported as an outward supply in the GST return.