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FACTS OF THE CASE:
Business of a company:- The Company is engaged in the business of trading of “Gift cards/ Gift voucher’s” etc. the company buys these “Gift cards/Gift Voucher” from different suppliers and sell them to retail or wholesale customers which includes B2B and B2C customers.
In view of the above, the questions put forward for our opinion is as follows:
CURRENT LEGAL POSITION:
We would like to re produce Section 7 of Schedule III of GST Act as given below:
(1) For the purposes of this Act, the expression “supply” as per section 7 includes:
(2) Notwithstanding anything contained in Section 7(1),
(3) Subject to the provisions of Sections 7(1) & 7(2), the Govt may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-
Activities or Transactions which shall be treated neither as a Supply of Goods nor a Supply of Services (Section 7)
(1) Services by an employee to the employer in the course of or in relation to his employment.
(2) The Services by any court or Tribunal established under any law for the time being in force.
(3) Following Services –
(4) Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
(5) Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
(6) Actionable claims, other than lottery, betting and gambling.
(7) Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.
(8) Under-mentioned supplies –
Actionable claims are only applicable for Goods, and not for services. Goods, as described in the CGST Act, are every kind of movable property other than money, but includes the claims.
The “Gift Card/Gift Vouchers” supplied, cannot be covered under the definition of “money” at the time of supplying them.
However they would take the color of money only when it is used for payment of consideration for the supply of goods or services procured by the end-user.
In light of the above, our opinion to the query raised is:
a) It is pertinent to note that Gift Card /Gift voucher shall entitle the holder to use it for redemption against goods or services and supplier is under obligation to accept it as a consideration or part consideration.
b) In addition to this tax is payable at the time of supply and Sections 12 and 13 of the CGST Act provide that time of supply In case of the supply of Gift Card /Gift voucher by a supplier, shall be:
(a) the date of issue of voucher, if the supply is identifiable at that point; or
(b) Date of redemption of voucher, in all other cases.
c) Also the suppliers of these Gift Card /Gift voucher’s who are renowned players in the industry are also not charging any GST at the time of purchase of said Gift Card /Gift voucher.
However, it is pertinent to note that wherever such Gift Card /Gift vouchers are exchanged in respect with goods or services are actually supplied as Consideration, being received towards issuance of Gift Card /Gift voucher shall be subject to GST under CGST Act 2017.
Conclusion:
GST Compliances Before Closing of Financial Year 2022-2023
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