In this case study, TaxMatic provided GST consultancy to Rachana Ranade & Associates on the GST implications of selling gift vouchers.
Under the GST Act, gift vouchers are treated as a supply when the underlying product or service is identifiable. Since the vouchers were specifically redeemable for courses, the time of supply is the date of issue of the voucher, not the date of redemption.
The value of supply is the actual price of the gift voucher. For instance, if a voucher is sold for ₹5,000, GST is calculated on that amount at the time of sale. On redemption, the voucher acts as a discount, and no additional GST is levied if the full course fee is covered.
The place of supply depends on whether the buyer's address is available. If provided, IGST or CGST/SGST applies based on inter-state or intra-state supply. If not, the supplier's location is considered.
For GST return filing, the sale of gift vouchers must be reported in GSTR-1 as a B2B or B2C supply. It need not be treated as an advance since the supply is clear and identifiable.
Conclusion
GST on gift vouchers redeemable against identifiable services is payable at the time of issue. Getting this right keeps the business compliant and avoids penalties.