Vouchers are goods and do not qualify as money unless redeemed; liable to GST: AAAR

Case Details: Appellate Authority for Advance Ruling, Karnataka Premier Sales Promotion (P.) Ltd., In re - [2022] 134 taxmann.com 73 (AAAR-KARNATAKA)

Judiciary and Counsel Details

• • Smt. Ranjana Jha and Smt. Shikha C, Member
  • M.S. Nagaraj, Adv. for the Applicant.

Facts of the Case

The appellant was engaged in trading of vouchers like gift vouchers, cash back vouchers and multi option vouchers by purchasing them from authorised issuers and selling them to various companies. It filed an application for advance ruling to determine taxability of vouchers. The Authority for Advance Ruling held that vouchers are goods and liable to GST of 18%. The appellant filed appeal against advance ruling and contended that vouchers are payment instruments and treated as consideration and not goods.

AAAR Held

The Appellate Authority for Advance Ruling observed that definition of money in GST law includes instruments when used as consideration to settle an obligation. The voucher in the hands of appellant does not settle an obligation but rather creates an obligation and cannot be termed as money. The voucher is an instrument recognised by Reserve Bank of India and does not qualify as money unless it is redeemed. The vouchers are purchased by appellant by paying consideration and the same are sold to clients for consideration. Therefore, it was upheld that vouchers would qualify as movable property and to be considered as goods.