ITC not available on vouchers & subscription packages supplied to customers free of cost: AAR

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  • Last Updated on 19 October, 2022

ITC on Subscription Package

Case Details: Authority for Advance Rulings, Karnataka Myntra Designs (P.) Ltd., In re - [2022] 143 203 (AAR-KARNATAKA)

Judiciary and Counsel Details

    • Dr. M.P. Ravi Prasad & T. Kiran Reddy, Member
    • Tarun Gulati for the Appellant.

Facts of the Case

The applicant was a major e-commerce platform and engaged in business of selling of fashion and lifestyle products through the portal. It filed an application for advance ruling to determine whether it would be allowed to claim ITC on vouchers and subscription packages procured from third party vendors for distributing to eligible customers against loyalty points.

AAR Held

The Authority for Advance Ruling observed that loyalty points do not have any monetary value and they are non-transferable and can’t be converted to cash. The redemption of loyalty points would involve no flow of consideration from customers and those vouchers & subscription packages shall be issued free of cost to customer and would amount to disposal by way of gift. Therefore, ITC would not be allowed as per Section 17(5) of GST Act, 2017.

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