GST to be levied on underlying items/companies in present vouchers, guidelines AAAR

GST to be levied on underlying items/companies in present vouchers, guidelines AAAR

Clearing the air over taxability of present playing cards or vouchers, the Tamil Nadu bench of the AAAR has dominated that GST could be levied on the underlying items/ companies on the time of redemption such pre-paid devices.

Kalyan Jewellers India Ltd has approached the Appellate Authority for Advance Ruling (AAAR) in opposition to the ruling by the Tamil Nadu state Authority for Advance Ruling (AAR), which had mentioned that GST at 12 per cent or 18 per cent could be levied relying on whether or not on such pre-paid devices was paper primarily based or magnetic strip primarily based respectively.

Modifying the AAR verdict, the AAAR has clarified that GST will probably be levied not on the provision of vouchers however on the underlying provide of products/ companies on the time of redemption and the time for fee of GST will probably be depending on the provisions detailed within the GST regulation.

In its order, the AAAR mentioned that vouchers are neither items nor companies and the GST regulation recognises it as an instrument of consideration (non-monetary kind) for future provide.

“… since voucher is simply an instrument of consideration and never items or companies, the identical is just not classifiable individually however solely the provision related to the voucher is classifiable in accordance with the character of the products or companies provided in change of the voucher earlier issued to the shopper,” the AAAR mentioned.

EY Tax Accomplice Abhishek Jain mentioned the taxability of vouchers has at all times been a gray space, each below the pre- GST and put up GST regime.

“This AAAR ruling is welcome and has offered acceptable readability to the trade on the taxability of vouchers,” Jain added.

(Solely the headline and movie of this report might have been reworked by the Enterprise Customary employees; the remainder of the content material is auto-generated from a syndicated feed.)

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