Corporate Card Rebates Not Taxable Under GST | AAR

Case Details: John Distilleries (P.) Ltd., In re [2026] 186 taxmann.com 27 (AAR-KARNATAKA)

Judiciary and Counsel Details

• Kalyanam Rajesh Rama Rao & Sivakumar S Itagi, Member
• Akbar Basha, CA for the Applicant.

Facts of the Case

The applicant was engaged in manufacturing liquor, sought an advance ruling on the GST liability of rebates received from the bank. It had obtained a corporate card from bank for payment of excise duty, under which it received a rebate based on total monthly excise duty payments made through the card. It contended that such rebates were merely post-transaction financial adjustments linked to card usage and did not represent consideration for any supply of goods or services. It was submitted that since the rebate arose automatically from the banking arrangement and not from any separate supply, it should not be subjected to GST. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that a supply under Section 7 of the CGST Act requires existence of consideration and a quid pro quo between supplier and recipient. It was observed that in the present case, the rebate granted by the bank was a post-transaction financial adjustment linked solely to the use of the corporate card and not attributable to any independent or identifiable supply of goods or services by the applicant to bank. It was further held that such rebate constituted a transaction in money falling within the definition of ‘money’ under Section 2(75) of the CGST Act and therefore did not amount to consideration for any supply. Consequently, it was ruled that the rebates did not fall within the scope of supply and were not liable to GST.

List of Cases Referred to

• Union of India v. Intercontinental Consultants & Technocrats (p.) Ltd [2018] 91 taxmann.com 67/66 GST 450/10 GSTL 401 (SC) (para 7.3).