Order Date – 27 November 2023

Parties: Tvl.Kalyan Jewellers India Ltd. Vs Union of India, Tamil Nadu State Appellate Authority for Advance Ruling, The Commissioner of GST & C.Ex., The Assistant Commissioner (ST)

Facts –

• The Petitioner, Tvl.Kalyan Jewellers India Ltd., is carrying on the business in the manufacture and sale of ornaments all over India through its retail outlets. As a part of the sales promotion, they were issuing different types of Pre-Paid Instruments such as “Gift Vouchers”.
• The petitioner stated that these Gift Vouchers/Gift Cards are “actionable claims” and therefore not liable to tax as they fall within the purview of the execution in Section 7(2) of the respective GST Enactments read with Schedule III to the respective GST Enactments.

Issue –

• Whether the GST is payable on Gift Vouchers?

Order –

• The Single Bench of Hon’ble High Court observed that “Gift Voucher/Card” is a debit card. It is like a frozen cash received in advance and thaws on its presentation at the retail outlet for being set off against the amount payable by a customer for purchase of merchandise sold by the petitioner or the amount specified therein is to be returned to the customer as per RBI’s Master Direction where a customer fails to utilize it within the period of its validity. “Gift Voucher/Card” is therefore an “actionable claim” within the meaning of Section 2(1) of the respective GST Enactments read with Section 3 of the Transfer of Property Act, 1882.
• If the “Gift Vouchers/Cards” is for a specified item of jewellery of specified value, tax is payable at the time of its issuance, as there is supply(i.e transfer) within in the meaning of Section 7(1-A) of the respective GST Enactments read with Sl.No.1(c) to the II Schedule to the respective GST Enactments. Therefore, tax is payable in view of Section 12(4)(a) of the respective GST Enactments at the time of issuance of such “Gift Vouchers/Cards”.
• On the other hand, if there is no supply ie. no transfer within in the meaning of Section 7(1-A) of the respective GST Enactments read with Sl.No.1( c) to the II Schedule to the respective GST Enactments, time of supply will get postponed to the actual time of redemption of the “voucher” to a future date of sale of merchandise or such goods when such Gift Voucher/Card is presented by the customer at the Counter of the petitioner.
• Hence, the clarification in the impugned order is modified to that extent and held that the petitioner will be liable to tax on the date of redemption under Section 12(4)(b) of the respective GST Enactments. The writ petition is partly allowed.