GST UPDATEZ ON 07-01-2025 by by R.SRIVATSAN, IRS, NACIN, CHENNAI
The circular outlines two primary models for voucher distribution, each carrying distinct GST implications. In the Principal-to-Principal (P2P) model, a distributor might purchase festival gift vouchers and earn margin. The margin so earned by the distributor is not subject to GST since the trading of vouchers itself is neither a supply of goods nor supply of services . In contrast, under the commission-based model , an agent helping distribute restaurant vouchers and earning a 5% commission on sales would need to pay GST on their commission income, as it represents a service provided to the voucher issuer.
There are other additional services also associated with vouchers that receive special attention in the circular. Marketing agencies providing co-branding services for retail vouchers, charging monthly fees for their services, must apply GST to these charges . Similarly, technology companies offering customer support services for voucher redemption must charge GST on their service fees. This clarity helps businesses properly structure their service agreements and ensure compliance.
Circular No: 243/34/2024-GST, dated:31-12-2024.
A detailed article has been published in TaxGuru may be read, through the following link.
https://taxguru.in/goods-and-service-tax/understanding-treatment-vouchers-gst-perspective.html
R. SRIVATSAN, IRS.,
NACIN, Chennai
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