The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that time of supply of the gift vouchers / gift cards by the applicant to the customers shall be the date of issue of such vouchers and the applicable rate of tax is applicable to that of the goods.
The Appellant, Kalyan Jewellers India Ltd. is in the business of manufacturing and trading of Jewellery Products. As a part of sales promotion, the Appellant introduced the facility of different types of Prepaid Instruments (PPIs) viz., Closed System PPIs, Semi-closed System PPIs, Open System PPIs through its retail outlets, third party PPI issuers and online portals to their Customers that are generally called ‘Gift Vouchers/ Gift Cards’ in trade practice.
The appellant has sought the advance ruling on the issue whether gift vouchers are goods or services, its time of supply and applicable rate of tax.
This appeal is filed against the order passed by the AAR, Tamil Nadu in Order dated November 25, 2019 wherein, it was held that ‘vouchers’ are a supply of goods as defined under CGST Act and GST at rate of 12% and 18% would be levied depending on whether on such PPIs is paper based or magnetic strip based respectively.
The coram of M.A. Siddiqui and G.V. Krishna Rao modified the order passed by the AAR, Tamil Nadu to the extent that vouchers are neither good nor service and the Central Goods and Services Tax Act, 2017 , recognized it as an instrument of consideration (non-monetary form) for future supply. Further, Held that, Goods and Services Tax will be levied at the time of issue of the voucher and not at the time of actual availing of service or time of redeeming the voucher as the supply is deemed to have been made at the time of issue of voucher itself.
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