GST Council Says Gift Vouchers Will Not Be Taxed:

GST Council Says Gift Vouchers Will Not Be Taxed The GST Council has cleared up confusion about gift vouchers. It announced that gift vouchers will not be treated as goods or services under the GST rules and will not be taxed. Relief for Retail and Corporate Sectors This is a welcome decision to companies and retail businesses who often use vouchers for promotion. It comes in the wake of appeals from the retail sector for more clarity, especially after the Karnataka Authority for Advance Rulings had ruled that vouchers were taxable as goods in the case of Premier Sales Corp. This is because of a suggestion by the law panel of the council. The panel had raised that vouchers, which come in the definition of the prepaid instrument under the Reserve Bank of India, are only applied to discharge any liabilities. In this way, vouchers can't be taxed. On the other hand, vouchers, if not treated as consideration, would fall under "actionable claims," and there again, it can't be taxed under GST. This has the effect of resolving the much-debated issues that surrounded the nature of vouchers by confirming them to be merely instruments, but not taxable supplies. Some other important discussions in this meeting The GST Council discussed some other issues of significance during the conference. They included: Taxes on insurance products are decreased, although decisions are given for further discussion.

• A proposal to raise GST on secondhand electric vehicles, which is still under consideration.
• There were talks about changing GST rates on luxury items like watches, pens, and shoes, but the states could not agree.

The Council is working to solve different tax issues while keeping both businesses and state governments in mind. More updates are expected as discussions on pending topics continue.