{"id":15305,"date":"2020-08-25T15:31:09","date_gmt":"2020-08-25T10:01:09","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=15305"},"modified":"2020-08-26T14:47:16","modified_gmt":"2020-08-26T09:17:16","slug":"coupons-and-vouchers-under-gst","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/","title":{"rendered":"Coupons and Vouchers under GST"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Since the Pre-GST period, the taxability of gift coupons and vouchers under GST are not considered as unlawful claims but it has been based on the subject of the lawsuit. The SC in the case of \u201c<strong><em>Sodexo SVC India Pvt. Ltd<\/em><\/strong>.\u201d, held that Sodexo\u2019s meal vouchers could not be subject to Octroi or Local Body Tax in Maharashtra. The Court held that the coupons are just \u2018payment instruments\u2019 and not \u2018goods.\u2019<\/p>\n\n\n\n<p>The electronic world or\nVirtual world is slowly developing and evolving into a new mode of payment\ninstruments facilitating people for the purchase of various goods and services.\nThese so-called&nbsp;<em>\u201cpayments\ninstruments\u201d&nbsp;<\/em>of the future, which are as follows-<\/p>\n\n\n\n<ul><li>Payment Instrument or Gateways or Hard form;<\/li><li>E-Wallet;<\/li><li>Prepaid Cash Cards;<\/li><li>Prepaid recharge coupons;<\/li><li>Prepaid Cash Vouchers;<\/li><li>Prepaid Gift Cards or vouchers;<\/li><li>Employers are distributing utility coupons, such as Sodexo Coupons;<\/li><li>Virtual currency like Bitcoins.<\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> Any other form of Virtual or electronic form, which may emerge in the future is a Payment Instrument.<\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/#Coupons_and_Vouchers_under_GST_Rule\" >Coupons and Vouchers under GST Rule<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/#Rate_of_GST_on_vouchers\" >Rate of GST on vouchers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/#Taxability_and_Legal_Provisions_of_Coupons_and_vouchers_under_GST\" >Taxability and Legal Provisions of Coupons and vouchers under GST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/#Rate_of_GST_on_vouchers-2\" >Rate of GST on vouchers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Coupons_and_Vouchers_under_GST_Rule\"><\/span>Coupons and Vouchers under GST Rule<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Vouchers are not well-defined\nin the Act. A general definition of coupons is \u201ca small printed piece of paper\nwhich entitles the holder to a discount or exchange for goods and services.\u201d<\/p>\n\n\n\n<p>&nbsp;\u2018Voucher,\u2019 in <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST Registration<\/strong><\/a>, essentially means any instrument which shall be accepted as deliberation wholly or partly for a supply. Consequently, a voucher is an asset for the beneficiary, and without a receiver, a coupon will lose its sense.<\/p>\n\n\n\n<p>Consequently, in a case of a supplier issuing a voucher to a recipient of goods, on his purchasing from the supplier, the coupon is not being viewed as an additional outcome of the supply made to the recipient. As an alternative, it is a tool that can be used in place of money or other consideration that can be used on the implementation of an additional inward supply of goods and services.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Time of supply in case of vouchers<\/h3>\n\n\n\n<p><strong><em>In the case of several coupons by a supplier, the time of supply should be\u2014<\/em><\/strong><\/p>\n\n\n\n<ul><li>The date of issue of the coupon, if the amount&nbsp;<strong>is recognizable<\/strong>&nbsp;at that point; <\/li><\/ul>\n\n\n\n<ul><li>The time of the redemption of vouchers.<\/li><\/ul>\n\n\n\n<p>The government, in its wisdom,\nin all probability, will treat \u2018vouchers relating to goods\u2019 and \u2018coupons\nrelating to services\u2019 as different and separate classes of businesses. A\nlayperson would comprehend that vouchers relatable to products would be those\nclasses of operations that can be exchanged for goods. In contrast, vouchers\nrelating to services being distinct and separate can be exchanged only for\nassistance.<\/p>\n\n\n\n<p>There can be a third class of communications relating to vouchers, namely, a gift voucher issued by a bank that can be exchanged only for cash. But a plain reading of the definition of goods and services designates that they both exclude money. Therefore, such of those vouchers relatable to money or money can be safely assumed to be outside the ambit of GST rules.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/government-unable-to-pay-states-gst-compensation-share\/\">Latest: Government unable to pay state\u2019s GST compensation share<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rate_of_GST_on_vouchers\"><\/span>Rate of GST on vouchers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rate of tax that will be\nappropriate to goods or services they are issued in respect of or that\napplicable at the time of redemption.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Value of supply<\/h3>\n\n\n\n<p>In the case of the supply of a\nvoucher, the value will be the redemption value of the voucher.<\/p>\n\n\n\n<p><strong><em>Example:-<\/em><\/strong> Mr.&amp; Ms. Verma purchase ten gift vouchers for Rs. Five hundred each from Crossword, and five vouchers from Four Fountains Spa costing Rs. 1,000 each, and gives them as return gifts to children and their parents for their son\u2019s birthday party. The vouchers from Four Fountains Spa had a special offer for couples \u2013 services for both persons at a price chargeable to one.<\/p>\n\n\n\n<p>The value of the supply of\ngoods will be the money value of the goods exchangeable against the voucher.<\/p>\n\n\n\n<p>Thus, in the case of vouchers from Crossword, the value would be Rs. 5,000 (i.e.,Rs.500 * 10) and the value of vouchers in case of Four Fountains Spa would be Rs.10,000 (i.e., Rs. 1,000 * 2 * 5).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Coupons and Vouchers under GST regime<\/h3>\n\n\n\n<p>The coupon is not defined under any provision of the Act in any law, can be understood from its following universal definition-<em>\u201c<strong>Coupon is a voucher enabling the holder to a discount in a specific product or service.<\/strong>\u201d<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Taxability_and_Legal_Provisions_of_Coupons_and_vouchers_under_GST\"><\/span>Taxability and Legal Provisions of Coupons and vouchers under GST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>We will now examine the taxability on the <strong>Coupons and vouchers<\/strong> under GST issued to numerous types of customers and the legal provisions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Valuation Provisions<\/h3>\n\n\n\n<p>Section 15 of the <strong><em>CGST Act<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/CGST\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> delivers the following information regarding the valuation of supply.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Time of supply in case of coupons and vouchers<\/h4>\n\n\n\n<p>The instrument under deliberation are \u2018Vouchers\u2019 which are given for use in the retail outlets of KJIL for purchase of jewelry, i.e., goods and consequently the time of supply is ruled by the provisions as per Section 12 (4) of the CGST Act, which states as follows: <em><strong>In the case of the number of vouchers by any supplier then the time of supply will be:-<\/strong><\/em><\/p>\n\n\n\n<ul><li>The time of issue of voucher if the supply of goods is recognizable at that point;<\/li><li>The time of renovation of voucher in all other case.<\/li><\/ul>\n\n\n\n<p>Therefore, if the vouchers are specific to any particular goods specified against the voucher, then the date of the issue of coupons is the date of supply of voucher to the customer. Though, as per the submission of the applicant, in the mainstream of cases, the gift vouchers or gift cards are saving against any jewelry bought. In such case, the date of supply is the date of redemption of voucher.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rate_of_GST_on_vouchers-2\"><\/span>Rate of GST on vouchers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"606\" height=\"400\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-103.png\" alt=\"\" class=\"wp-image-15306\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-103.png 606w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-103-300x198.png 300w\" sizes=\"(max-width: 606px) 100vw, 606px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The taxability of gift coupons and vouchers under GST as goods and not unlawful claims has been a subject substance of the lawsuit. The SC, in the case of Sodexo SVC India Pvt. Ltd., held that Sodexo\u2019s meal vouchers could not be subject to Octroi or Local Body Tax in Maharashtra. The Court held that the coupons are just \u2018payment instruments\u2019 and not \u2018goods.\u2019 The electronic world or Virtual world is slowly developing and evolving into a new mode of payment instruments facilitating people for the purchase of various goods and services.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-for-appeals-under-gst\/\">Procedure for Appeals under GST<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since the Pre-GST period, the taxability of gift coupons and vouchers under GST are not considered as unlawful claims but it has been based on the subject of the lawsuit. The SC in the case of \u201cSodexo SVC India Pvt. Ltd.\u201d, held that Sodexo\u2019s meal vouchers could not be subject to Octroi or Local Body [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":15331,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[918],"acf":{"service_id":"334"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":11134,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15305"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=15305"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15305\/revisions"}],"predecessor-version":[{"id":15376,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15305\/revisions\/15376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/15331"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=15305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=15305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=15305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}