The Karnataka Authority of the Advanced Ruling passed a decree that vouchers shall also carry a levy of 18% GST. The reason being, they are subject to section 12(5) of the CGST Act 2017.
Here, in this case, the applicant Messrs Premier Sales Promotion Private Limited is indulged in the trade of providing marketing services. The nature of services are on a case to case basis and the company enters into a tailored agreement with each customer. While during its course of business, the applicant gets orders for supplying e-vouchers wherein the applicant is involved in sourcing e-vouchers for the customers on the basis of orders received and works as an intermediary for the buying and selling of the e-vouchers.
The above-mentioned applicant has sought a ruling whether the vouchers themselves or the activity of supplying them is taxable and if yes at what percentage. The applicant further submitted that the jargon voucher is also defined in section 2(118) of the CGST Act.
As per this section “Voucher means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services
Get to know GST provisions and rules on the free supply of goods. Also, we have included rules regarding ITC reversal on free supplies of goods and services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument.”
The 2 member bench of Mashood Ur Rehman Farooqui and Dr MP Ravi passed a ruling that the act of supplying vouchers is subject to section 12(5) of the CGST Act 2017 and the rate applicable is 18% considering Entry Number 453 of schedule 3 of Notification bearing number 1/2017-Central Tax (Rate) that is dated June 28, 2017.
