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New Delhi: India's Central Board of Indirect Taxes and Customs (CBIC) Wednesday clarified that transactions involving vouchers do not constitute supply of goods or services and are thus not liable to goods and services tax. ET Year-end Special Reads 2024 Rewind: Elections, extreme weather, sporting glories, moments that made history, and heartfelt goodbyes Sensex & Nifty in 2025: Predictions, targets, must-have stocks for the new year From Adani bribery allegations to PayTM Bank ban: Six shocks that rocked India Inc in 2024 However, GST will be applicable on additional services related to vouchers, such as marketing or commission-based distribution. Similarly, unredeemed vouchers, or 'breakage,' are not taxable as they do not constitute consideration for any supply, it said.
The clarification comes following a decision in this regard by the GST Council. "Overall it's a significant development for the industry as it well help in bringing certainty of taxes and reduce undue litigation," Saurabh Agarwal, partner, EY said. "It may however be interesting to see if the industry may explore claiming a refund of costs borne on GST already paid on such unredeemed vouchers," he added.
The CBIC has also issued clarifications on Input Tax Credit (ITC) on Ex-Works Contracts and e-commerce operators. CBIC has clarified that businesses can claim ITC on goods purchased under "Ex-Works" contracts from the date of the invoice itself. This is because, under these contracts, goods are considered "delivered" to the buyer when handed over to the transporter at the seller's factory gate.
Many businesses, especially those in sectors like automotive, heavy engineering, EPC contracts and others were facing difficulties due to confusion around when they could claim Input Tax Credit (ITC) on goods purchased on ex-works basis. Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Basics of Generative AI: Unveiling Tomorrows Innovations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Generative AI for Dynamic Java Web Applications with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Performance Marketing for eCommerce Brands By - Zafer Mukeri, Founder- Inara Marketers View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance A2Z Of Money By - elearnmarkets, Financial Education by StockEdge View Program Marketing Modern Marketing Masterclass by Seth Godin By - Seth Godin, Former dot com Business Executive and Best Selling Author View Program Astrology Vastu Shastra Course By - Sachenkumar Rai, Vastu Shashtri View Program Strategy Succession Planning Masterclass By - Nigel Penny, Global Strategy Advisor: NSP Strategy Facilitation Ltd. View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) AI and Analytics based Business Strategy By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program Web Development A Comprehensive ASP.
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