The Taxability of Vouchers, Cash Vouchers, or E-vouchers have always created a buzz in the industry. On one hand some say it’s a supply and while others say it’s not. Voucher is defined under section 2(118) of
the CGST Act, which means an instrument where it is an obligation to accept it as a consideration or part
consideration for goods or services or both supplied or to be supplied. Money is defined under section
2(75) of said Act and it includes an instrument recognized by RBI when used as a consideration to settle
an obligation. Vouchers etc. are issued with the approval of RBI. Generally, vouchers do not identify
goods or services to be supplied and it is identified later at the time of their redemption. Therefore, it can
be said that Voucher is an instrument issued with the approval of the RBI, it doesn’t have any intrinsic
value, it is used as a consideration to settle an obligation for goods or services or both to be supplied at
a future date at the time of its redemption. Now thought for food is to analyze the time of supply.
A similar question came before the Honorable High Court of Karnataka when a taxpayer lost a decision
by AAR and AAAR. HC observed that PPI do not permit cash withdrawal and are issued with approval of
RBI. It is merely that taxpayer procured printed forms and delivered it. It is a pre-deposit that can be
transacted at the time of its redemption. Therefore, decision of AAR and confirmed by AAAR, that time
of supply is the date of issuance of Voucher is not correct.
SW India Comments:
In our view, vouchers should be taxed under GST at the time of its redemption where goods or services or
both under question could not be identified at the time of their issuance.
Source: M/S PREMIER SALES PROMOTION PVT LIMITED vs. THE UNION OF INDIA HIGH COURT OF
KARNATAKA
Writ Petition No. 5569 of 2022 (T-RES) Jan 16, 2023
