No GST on Pure Trading of Vouchers: CBIC Clarification

CBIC Clarification: Circular Number 243/37/2024-GST dated 31-Dec-2024

What would be the GST treatment of transactions in vouchers by distributors/sub-distributors/agents, etc.?

There are primarily two models for distribution of vouchers through distributors/sub-distributors/agents, etc.

1. Where vouchers are distributed through the distributors/sub-distributors/dealers on a Principal-to-Principal (P2P) basis: Pure trading of vouchers in this case would not constitute either supply of goods or supply of services. Accordingly, such trading of vouchers would not be leviable to GST as per section 9 (1) of the CGST Act.

2. Where vouchers are distributed using distributors/sub-distributors/agents on a commission/fee basis: In such cases, the transactions between the voucher issuer and the distributors/sub-distributors/agents are on a principal-agency basis. In such cases, distributors/sub-distributors/agents do not operate autonomously, do not own the vouchers, and only act as agents of the voucher issuer. In such cases, GST would be payable by such distributor/sub-distributor/agent, acting as an agent of the voucher issuer, on the commission/fee or any other amount by whatever name called, for such purpose, as a supply of services to the voucher issuer.

Whether “transactions in vouchers” fall under the category of supply of goods and/or services?

Where the voucher is covered as a pre-paid instrument recognized by the RBI and is used as a consideration to settle an obligation, then in such cases, the voucher will fall under the definition of “money”. In such a case, as “money” is excluded from the definition of goods and services as provided in section 2(52) and section 2(102) of the CGST Act, respectively, the transactions in the voucher would be considered neither as a supply of goods nor as a supply of services.

In cases where a voucher is not covered as a pre-paid instrument recognized by RBI and hence cannot be treated as money, the voucher will be in the nature of an obligation on the supplier to receive it as consideration or part consideration and assure the beneficiary/voucher holder to claim certain goods and/or services as specified on the voucher or in the related documents. In such cases, the voucher can be considered as an “actionable claim” within the meaning of section 2(1) of the CGST Act, read with section 3 of the Transfer of Property Act, 1882.

Therefore, it is clarified that irrespective of whether a voucher is covered as a pre-paid instrument recognized by RBI or not, the voucher is just an instrument that creates an obligation on the supplier to accept it as consideration or part consideration, and the transactions in the voucher themselves cannot be considered either as a supply of goods or as a supply of services. However, the supply of underlying goods and/or services, for which vouchers are used as consideration or part consideration, may be taxable under GST.

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