Quick Summary
In a significant move to address long-standing concerns regarding the taxability of vouchers under GST, the GST Council made the following recommendations: i. To omit sections 12(4) and 13(4) from CGST Act, 2017 and rule 32(6) from CGST Rules, 2017 to resolve ambiguities in the treatment of voucher
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The GST Council has decided to omit sections 12(4) and 13(4) of the CGST Act, 2017, and rule 32(6) of the CGST Rules, 2017, to resolve ambiguities. Transactions in vouchers will be treated neither as a supply of goods nor services.
Distribution of vouchers on a principal-to-principal basis is not subject to GST. However, if distributed on a principal-to-agent basis, the commission or fee charged by the agent is taxable under GST.
No, unredeemed vouchers, often referred to as breakage, will not be considered a supply under GST, and no GST is payable on any income booked in accounts from them.
Additional services like advertisement, co-branding, marketing, promotion, customization, technology support, and customer support related to vouchers will be subject to GST on the amount paid for these specific services.
A voucher is an instrument where there's an obligation to accept it as consideration or part consideration for a supply of goods or services, and the goods/services or their suppliers are indicated on the instrument or related documentation.
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