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TMI Blog2021 (8) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... to discharge their obligation to pay consideration for the goods or services procured by them from their suppliers. Hence these payment instruments would not obtain the character of money at the time of their supply by the applicant. Actionable claims are unsecured debts or it is a beneficial interest in a movable property which can be enforced by the civil courts. Further it is found that Insolvency and Bankruptcy Code 2016 defines Debt as a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. The vouchers are not covered under actionable claim as they are not debt. They have an expiry period - the entitlement of redemption is transferred or delivered unto the possession of the purchaser at the time of supply of vouchers by the applicant to its clients and therefore supply of vouchers by the applicant is not an actionable claim. Whether the impugned transaction of trading of vouchers amounts to supply in terms of Section 7(1) (a) of the CGST Act 2017 and if so whether the supply is of goods or services? - HELD THAT:- In the instant case the applicant is involved in trading of vouchers, for a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ba Road, Bangalore-560 001, having GSTIN 29AAECP5056A1ZL, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in FORM GST ARA-01 discharging the fee of ₹ 5,000/- each under the CGST Act and the KGST Act. 2. The applicant is a Private Limited Company registered under Goods and Services Act, 2017. The applicant has sought advance ruling in respect of the following questions:- i. Whether the vouchers themselves, or the act of supplying them is taxable, and at what stage, for each of the three categories of transactions undertaken by the applicant? ii. If the answer to the above question is in the affirmative, what would be the rate of tax at which this would be taxable, i.e. which category would this be taxed under? 3. Admissibility of the application: The question is about whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term and hence is admissible under Section 97(2)(g) of the CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined in Section 2(118) of the CGST Act as follows: voucher means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or 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; 5.2 The relevant extract of Section 12 of the Act, which deals with the time of supply of goods, reads as follows:- (4) In case of supply of vouchers by a supplier, the time of supply shall be,- (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases. (5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall,- (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid. 5.3 Vouchers are instruments which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.6 Actionable Claims: 5.6.1 The applicant has stated that Section 2(1) of the CGST Act defines actionable claims , that it shall have the same meaning as assigned to it in Section 3 of the Transfer of Property Act, 1882. While the definition of goods under the CGST Act expressly includes actionable claims, Schedule III of the CGST Act exempts actionable claims from tax on account of it being an activity or transaction which shall be treated neither as a supply of goods nor a supply of services . 5.6.2 If Section 2(102) of the CGST Act defines services to mean anything other than goods, money and securities, but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged is considered, then the act of supplying vouchers could be a service. The applicant states that since actionable claims are specifically considered supply of neither goods nor services by virtue of Schedule III, this activity by them would have to be fully exempt. 5.7 Money: 5.7.1 The applicant submits that under Section 2(75) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such customers as per the order received and acts as a trader for buying and supplying of e-vouchers. 9. Section 2(118) of the CGST Act 2017 defines voucher and is as under:- voucher means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or 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; It is clearly evident from the definition supra that when there is an obligation to accept the instrument as a consideration or part consideration for a supply of goods or services or both, then such instruments would qualify as vouchers. The payment instruments, in the instant case, squarely would be covered under the definition of vouchers as there is an obligation for the acceptor to accept it as consideration or part consideration for a supply of goods or services or both. We have gone through the copy of the agreement entered into between the applicant and Amazon and the agreement between the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with the Premier Sales Promotions Pvt. Ltd. for marketing of such a product or service. These Terms Conditions are subject to Indian Law and the exclusive jurisdiction of the Courts in Mumbai Invoices issued to M/s. Milklane have following information:- 1. The application on of the above said incentive vouchers are for consumer promotions only. These vouchers are not valid and cannot be used by employees or dealers for Internal R R or Trade incentive programs. 2. Premier Sales Promotions Pvt. Ltd to activate the voucher codes in batches as per confirmation from MILKLANE DAIRY SERVICES PRIVATE LIMITED. 3. Voucher Codes cannot be interchanged (between Milk and Dahi Packs) as they will already be printed on MILKLANE DAIRY SERVICES PRIVATE LIMITED product packaging and these voucher codes will be integrated into Premier Sales Promotions Pvt. Ltd backend 4. This offer entitles the Participant cashback on their Online Wallet or Bank Account Or UPI. The Participant will be responsible for their choice of the cashback transfer method. 5. If the Participant is not a wallet partner registered customer, he/she will be required to register on the wallet par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Voucher which is a voucher purchased by the applicant and supplied to the vendors who will issue them to their customers. The customers can utilize these vouchers to make payment for any supply of goods or services by the suppliers who are tied up with the applicant. These suppliers who receive the vouchers will settle the same with the applicant. In all these above categories of vouchers, it is observed that the applicant is supplying these vouchers and they are used as payment instruments for the payment of consideration or part consideration for supply of goods or services, in the hands of the end user. We further observe that the first type of voucher (Gift Voucher) can be categorized under closed PPI, whereas the other two vouchers i.e. Cash Back Voucher and Multiple Options Voucher are semi closed PPIs. 11. Now we proceed to examine whether the impugned vouchers are covered under money . In this regard, we invite reference to the definition of money under Section 2(75) of the CGST Act 2017, which is as under:- (75) money means the Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3 of Transfer of Property Act, 1882 defines actionable claim to mean as under: actionable claim means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent; We find that there are two limbs of the definition. Actionable claims are unsecured debts or it is a beneficial interest in a movable property which can be enforced by the civil courts. We further find that Insolvency and Bankruptcy Code 2016 defines Debt as a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. We note that vouchers are not covered under actionable claim as they are not debt. They have an expiry period. We also rely on the decision of Hon hie Supreme Court of India, in the case of H. Anraj Etc vs Government Of Tamilnadu Etc on 4 October, 1985 , where it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper are undoubtedly goods, as they are tangible. Now the question is whether the e-vouchers, which are intangible, are also goods or not. In this regard, we invite reference to Section 2(52) of the CGST Act 2017, wherein the term goods has been defined to mean as under: Section 2(52),-goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. The Hon ble Supreme Court of India, in the case of Tata Consultancy Services Vs State of Andhra Pradesh (2004) observed that goods can be tangible or intangible, the test to determine whether property is goods is whether the concerned item is capable of abstraction, consumption use and whether it can be transmitted, transferred, delivered, stored, possessed etc.. In the instant case the item voucher has all the aforesaid capabilities and hence it gets covered under goods, though it is intangible. Further, the Hon hie Supreme Court of India, in the case of Vikas Sales Corporation Vs. CCE (1996), with regard transfer of import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a supplier, the time of supply shall be,- (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases. (5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall,- (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid. 14.1 It is observed on application of Place of Supply principle to the three types of vouchers issued by the applicant, that in case of Gift Vouchers, the applicant is supplying the vouchers which are issued by third parties to his customers, who in turn issue the same to their customers, who will redeem them and the third party who has issued the voucher would consider them to provide deduction in the amount payable by the claimant. In the instant case neither the applicant nor their customer is aware of the transaction or the purpose for which the voucher would be redeemed. Hence the time of supply would be governed by the clause (a) of su ..... 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