Query on applicability of TDS on Purchase of Flipkart/ Snapdeal Gift Vouchers for distributing to customers as reward/ sales promotion
Background/ Case facts:
-Our company is purchasing Flipkart/ Snapdeal gift vouchers (GV) and giving to distributors/ customers on achivement of targets
-These GVs are Prepaid Instruments. And companies issuing such GVs has to take RBI approval / purchase GVs through authorised intermediaries having approval from RBI.
-These GVs have fixed validity period. These are non-renewable/ non refundable vouchers. And they have to be redeemed at the time of online purchase of goods/service from the portal.
-Portals (flipkart/snapdeal) are not charging anything extra as service charge for issuing these GVs. And accepting these vouchers as currency/ money at the time of redemption.
-Portals are claming that these GVs are neither "goods" nor "services". Hence they do not apply VAT/ ST while selling these GVs.
-Furhter, sellers of GV also claim that TDS will not be applicable at all.
Query:
-Whether TDS has to be deducted at the time of making payments for purhcase of such GV.
-Is there any circular/ clarification issued by CBDT in this regard?
Thanks in anticipation.
CAclubindia
