Taxabilty ?

[Harish Chander Bhatia]

My client Y is engaged in providing business support service. Y sold gift vouchers, each value Rs:10000/- to the company X. The company X will give these gift Vouchers to its customers on purchase of Rs:50000/-. The customer will fill-up the details in the gift voucher and will send back to Y with an amount of Rs:20000/- and on receipt of filled up gift voucher and Rs: 20000/- from the customer, Y will arrange for the holiday package, including travel cost, boarding and lodging , which will cost to Y approx Rs:50000/-. Further against the gift vouchers initially sold by Y to X , the X company instead of making any payment has given gift voucher of his company to Y. redeemable at any of its outlets . Please advise how this would be chargeable under service tax.

AI Summary

Gift Voucher Transactions: Are Y's Services to X Taxable Under New Regulations? Exploring Brand Promotion Implications. A client, Y, provides business support services and sold gift vouchers to company X. X distributes these vouchers to customers who, upon spending a certain amount, can redeem them with Y by paying an additional fee. Y then arranges holiday packages for these customers. Instead of monetary payment, X provided Y with its own gift vouchers. The discussion centers on whether these transactions are subject to service tax, considering the nature of services provided and recent tax law changes. The replies suggest that if Y's services promote a brand, they might be taxable under new regulations.