- The GST Council during its 55th meeting in Jaisalmer decided that transactions involving vouchers are not a supply of goods or services and will not be taxed under GST
- This decision will clarify and resolve disputes about the taxation of gift vouchers
- The retail sector had sought clarity following a ruling by the Karnataka Authority for Advance Rulings that deemed vouchers taxable as goods
- The council’s decision was influenced by recommendations from its law panel which noted that vouchers are prepaid instruments under RBI and should not be taxed
- Vouchers not considered as consideration could be categorized as actionable claims, which are not taxable
- A tax expert stated that this clarification would end disputes over the nature of vouchers, confirming they are instruments and not supplies
- The GST Council also discussed tax cuts on insurance products, increasing GST on used electric vehicles, and adjusting taxes on luxury items but deferred some proposals due to disagreements among states
Source: a2ztaxcorp.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
