Does GST applicable on cash back received on credit card redemption points?
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Quick Summary
In India, GST is generally applicable to cashback received from redeeming credit card points. This cashback is viewed as a discount or benefit from the card issuer, incurring an 18% GST. However, this rule may not apply to loyalty points earned on business trips in Canada, where point redemption could be a taxable employee benefit.
GST is applicable on cash back received on credit card redemption points in India12. The cash back amount is considered as a discount or a benefit given by the credit card issuer, and hence it is subject to GST at 18%1. However, this does not apply to the loyalty or other points programs that are collected by the employees when travelling on employer-reimbursed business trips or incurring other business-related expenses in Canada3. In that case, the redemption of points is generally a taxable benefit for the employee