The Tamil Nadu appellate authority for advance rulings (AAAR) has cleared the confusion over taxability of vouchers such as Amazon gift cards, Shoppers Stop vouchers, Zara Vouchers etc. under the goods and services tax (GST) system.
It ruled that GST will be levied on the underlying goods and services at the time of redemption of vouchers, Abhishek Jain, partner at EY, said.
As such, GST would be imposed on goods and services bought through vouchers.
Earlier, authority for advance rulings (AAR) of the state had ordered that the supply of voucher itself will be taxable at varied rates depending on whether it paper based or magnetic strip based. The former will attract 12 per cent and the latter 18 per cent GST, it had ruled.
Jain said,"The taxability of vouchers has always been a grey area, both under the pre-GST and post-GST regime. The ruling by TN AAR had further added to the confusion. The ruling by AAAR has provided appropriate clarity to industry on the taxability of vouchers."
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