Gift voucher- recording

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Mohamed yeaseen M (Querist)
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12 August 2024 How to record gift voucher given when sale exceed certain amount
1.if the voucher is claimed by us
2.if the voucher is claimed to someother company for the voucher of them

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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12 August 2025 Here’s how to **account for gift vouchers given on sales exceeding certain amount** in two scenarios:

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### 1. **If the voucher is claimed by you (your company):**

* When you **give a gift voucher** as a promotion to customers on sales exceeding a threshold, and **you later redeem the voucher yourself** (e.g., against purchases from your own company):

**Accounting:**

| Transaction | Accounting Entry |
| -------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- |
| At time of issuing voucher | No immediate expense (considered as a marketing expense or provision if material) |
| When voucher is redeemed | Debit: Sales / Marketing Expense (value of voucher redeemed) Credit: Liability (if provision made earlier) or no entry if no provision |

**GST treatment:**

* GST is charged on the **sale value before discount** (voucher reduces net sale).
* When voucher is redeemed, no separate GST on voucher redemption (considered as discount).

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### 2. **If the voucher is claimed to some other company (e.g., you give voucher of another company):**

* If you give a gift voucher of **another company** to your customers:

**Accounting:**

| Transaction | Accounting Entry |
| ---------------------------------------------------- | ------------------------------------------------------------------------------------- |
| At time of giving voucher | Debit: Marketing Expense (cost of voucher) Credit: Cash/Payable to other company |
| When the customer redeems voucher with other company | No accounting entry for you; other company records sale |

**GST treatment:**

* GST is applicable **when you purchase the voucher** (if taxable).
* When customer redeems voucher at other company, GST is charged by that company on the sale.

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### Summary:

| Scenario | Accounting Treatment | GST Treatment |
| -------------------------------- | --------------------------------------------- | ------------------------------------------------------------------- |
| Voucher claimed by you | Expense recognized on redemption | GST on full sale; voucher = discount |
| Voucher claimed by other company | Expense recognized on issue (cost of voucher) | GST on purchase of voucher; other company charges GST on redemption |

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If you want, I can help you prepare journal entries or GST treatment examples. Need that?

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