BENGALURU: Vouchers are exempted from GST, the Karnataka high court ruled in a recent judgment, asserting that these don’t carry any value and they’re not goods or services either.
“The definition of ‘vouchers’ under the CGST Act makes it clear that vouchers are mere instruments accepted as consideration for supply of goods or services. They have no inherent value of their own,” a division bench headed by Justice PS Dinesh Kumar said.
“As vouchers are considered ‘instruments’, they would fall under the definition of ‘money’…” as defined by the law, which also “excludes ‘money’ from the definition of goods and service” and therefore no tax can be levied on it, the HC said.
Allowing a petition filed by Premier Sales Promotion, a Bengaluru-based company, the HC said that in substance, the transaction between the assessee and his clients is procurement of printed forms and their delivery. “Printed forms are like currency. The value printed on the form can be transacted only at the time of redemption of the voucher and not at the time of delivery of vouchers to the assessee’s client. Therefore, the issuance of vouchers is similar to pre-deposit and not supply of goods or services,” the court said.
The bench said the vouchers involved in the petition are semi-closed prepaid payment instruments (PPIs) in which the goods or services to be redeemed are not identified at the time of issuance. The petitioner had challenged a 2021 order passed by the Karnataka Appellate Authority for Advance Ruling that vouchers are taxable as goods at the time of supply.

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