9911796707
TMI Blog2024 (10) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... s, discount coupons, prepaid instruments, and similar items. Is Voucher goods or service? - In the instant case the Appellant purchases the vouchers by paying a consideration to the issuer. The vouchers are also sold to the clients of the Appellant for a consideration. The vouchers have both a value and an ownership, which is transferred by the issuer of these vouchers to the appellant, and then to the ultimate beneficiary who redeems the voucher. The vouchers qualify to be considered as movable property and the goods . Whether the vouchers are in the nature of actionable claims? - Actionable claim qualifies as 'goods'. Actionable claim is defined to have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882. Thus, actionable claim is a claim to an unsecured debt or a claim to any beneficial interest in movable property that is not in the possession of the claimant. Transactions/activities in actionable claims are kept outside the ambit of GST, except for the following claims: betting, casinos, gambling, horse racing, lottery and online money gaming. Actionable claims are considered goods under the CGST Act but have some special rules. They a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. (ii) The Supply of Gift cards/ Vouchers/ pre-paid Vouchers are taxable as supply of goods and the time of supply shall be decided as per Section 12 (4) of the CGST Act, 2017. (iii) We hold that GST is applicable on the commission/discount earned in the trading of Vouchers/Coupons by the appellant and the time of supply will be the time when the Vouchers/Coupons are traded or sold. The value of service shall be the margin between the buying and selling price of the Vouchers/Coupons. The Ruling given hereinabove applies to the unique facts and circumstances of the appellants' matter in appeal and is based upon the submissions and evidences made available in this regard. This ruling is valid only within the jurisdiction of Authority for Advance Ruling, Uttar Pradesh in terms of the provisions of The Central Goods and Services Tax act, 2017 and Uttar Pradesh Goods and Services Tax Act, 2017. - SH. PRAMOD KUMAR AND DR. NITIN BANSAL, MEMBER (Passed by the Appellate Authority for Advance Ruling under Section 101(1) of Uttar Pradesh Goods and Services Tax Act, 2017) Represented by : Sri Manoj Kumar Goyal, C.A. At the outset, we would like to make it clear that the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of supply of Vouchers in the present case shall be decided as per sub-section (1), (2) and (3) of Section 15 of the CGST Act, 2017. 3. Grounds of appeal: Being aggrieved by the aforesaid ruling, the Appellant preferred instant appeal on the ground that the members of authority of Advance Ruling has erred in appreciating the facts of the present case and legal provisions while passing the ruling. 4. Reason for delay in filing appeal before the Appellate Authority. The appellant was of the opinion that the appeal is to be filed online only and was continuously checking the status of the order on the portal but till the date of filing appeal, no order was uploaded on the portal. So, the appellant physically procured the order from Lucknow and made appeal in person to the Appellate Authority. 5. Personal Hearing The Authorised representative, Shri Manoj Kumar Goyal, C.A. of the party M/s Payline Technology Private Limited, Basement, H-47, Cabin No.7, Block-H, Sector 63, Noida, Gautam Buddha Nagar, Uttar Pradesh-201301, appeared for personal hearing on 27.08.2024 and argued their case and requested for two days' time to submit additional defence. The party vide their letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the Advance Ruling No. UP ADRG 43/2024 dated 20.02.2024, appeal filed by the appellant and the additional submissions dated 28.08.2024 filed by the appellant, we find that the appellant has changed their version about their business as under: I. Earlier the appellant submitted before the Authority for Advance Ruling, GST, Uttar Pradesh as well as in their appeal filed in Form GST ARA-02 signed dated 05.06.2024 that the appellant is in the business of selling and purchasing Gift Cards, Vouchers, and pre-paid Vouchers (closed or semi-closed-ended vouchers against which goods or services can be purchased from specific brands on e-commerce platforms such as Amazon, Flipkart, etc.) . II. Now, the appellant vide letter dated 28.08.2024 submitted their additional submissions describing their business as the appellant is in the business of selling and purchasing Gift Cards, Vouchers, and pre-paid Vouchers (closed vouchers against which goods or services can only be purchased from the issuing entity of the instruments/vouchers) . 7.1 The issue of payment instruments in India is regulated by the Reserve Bank of India (RBI) in terms of the Payment and Settlement Systems Act, 2007 (PSS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments. These instruments do not permit cash withdrawal or redemption by the holder. vi. Open System Payment Instruments: These are payment instruments which can be used for purchase of goods and services, including financial services like funds transfer at any card accepting merchant locations (point of sale terminals) and also permit cash withdrawal at ATMs/BCs. 7.2 Thus, the pre-paid payment instruments (PPI, in short) that can be issued in India are classified under three categories: closed, semi-closed, and open system payment instruments. Closed system PPI's can be issued by any entity for making supply of goods or services, exclusively from the said entity. Such closed ended PPIs cannot be used for cash payments/settlements or withdrawals. Semi-closed PPIs can be issued by Banks and nonbanking entities. Its functioning is similar to that of a closed PPI, as the same can be used for purchase of goods and services and the same cannot be withdrawn. However, unlike ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey . 8. Further, on examining the facts and records of the case we find that Voucher is defined as under: 8.1 What is a Voucher : Section 2 (118) of GST Act defines: 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; 8.2 Section 12 (4) specifies that 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. 8.3 Thus, as per GST laws, a voucher is an instrument that entitles the holder to receive goods or services or a discount on goods or services upon redemption. Vouchers are instruments representing value to facilitate a supply. Vouchers include gift cards, discount coupons, prepaid instruments, and similar items. 9. Is Voucher goods or service: 9.1 The definitions under CGST Act, 2017 are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, of the claimant, for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent. 9.6 The term debt is not defined in GST law. The term debt in P. Ramanatha Aiyer's advanced law lexicon, debt means: A sum of money due from one person to another. A debt exists when a certain sum of money is owing from one person to another 'Debt' denotes not only the obligation of the debtor to pay, but also the right of the creditor to receive and enforce payment. Consequently, vouchers or gift card could be said to be a claim to any debt, other than a debt secured by mortgage of immoveable property. 9.7 Actionable claims are considered goods under the CGST Act but have some special rules. They are only taxed when transferred, sold, or given away for a price. This means that GST is not charged on the debt itself but only on the supply of the right to recover the debt. This is because actionable claims are neither a supply of goods nor services as per Schedule III of the CGST Act. GST liability arises when the claim is assigned, sold, or disposed of for consideration. In case of Vouchers, it has already been observed that Voucher by itself is a mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific provision for the deciding the time of supply of the vouchers and is applicable to the appellant. Thus, we hold that time of supply of vouchers will be determined in terms of Section 12 (4) of the CGST Act, 2017. 11.1 We observe that that the appellant in their appeal have stated about their mode/method of transaction as under: Appellant bought a gift card worth Rs. 1000/- from XYZ Company at a discount of 3%. This means appellant has paid Rs. 970/- for it. Later, appellant sold this gift card to ABC Company for Rs. 975/- after giving them a discount of 2.5%. From this deal, appellant will earn a profit of Rs. 5/-, and GST is paid when the vouchers are redeemed by the customers. 11.2 If the discount coupons are single-purpose vouchers (where the supply is identifiable), they are taxed at the point of sale. For multi-purpose vouchers (where specific goods/services are not identifiable at the time of issuance), GST is applicable upon redemption. 11.3 In relation to VAT, Hon'ble Supreme Court overruled the judgment of Bombay High Court that had classified coupons as goods in case of Sodexo Coupons [2015-TIOL-293-SC-Misc]. It clarified that vouchers are merely payment inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the Vouchers/coupons are traded or sold. The value of service shall be the margin between the buying and selling price of the coupons. 13. In view of the foregoing, we make the following order: (i) We set aside the impugned ruling given vide UP ADRG - 43/2024 dated 20.02.2024 passed by the Authority for Advance Ruling against the Appellant. (ii) The Supply of Gift cards/ Vouchers/ pre-paid Vouchers are taxable as supply of goods and the time of supply shall be decided as per Section 12 (4) of the CGST Act, 2017. (iii) We hold that GST is applicable on the commission/discount earned in the trading of Vouchers/Coupons by the appellant and the time of supply will be the time when the Vouchers/Coupons are traded or sold. The value of service shall be the margin between the buying and selling price of the Vouchers/Coupons. 14.1 The Ruling given hereinabove applies to the unique facts and circumstances of the appellants' matter in appeal and is based upon the submissions and evidences made available in this regard. 14.2 This ruling is valid only within the jurisdiction of Authority for Advance Ruling, Uttar Pradesh in terms of the provisions of The Central Goods and Services Tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
