<p><span>The Ministry of Finance, Government of India, issued Circular No. 243/37/2024-GST on December 31, 2024, providing critical clarifications on the GST treatment of vouchers. This circular addresses various issues such as whether transactions in vouchers are a supply of goods and/or services, GST levied on trading of vouchers by distributors, and the taxability of unredeemed vouchers.</span></p><h4>Key Highlights:</h4><ol start="1"><li><span><strong>Supply of Goods or Services</strong>: Vouchers, whether recognized as pre-paid instruments by the RBI or not, are not considered as a supply of goods or services. They are instruments creating an obligation on the supplier to accept them as part of the consideration for goods and/or services.</span></li><li><span><strong>Trading of Vouchers</strong>: Pure trading of vouchers by distributors on a Principal-to-Principal (P2P) basis is not considered a supply of goods or services and is therefore not subject to GST. However, commission/fee-based transactions are considered a supply of services and attract GST.</span></li><li><span><strong>Additional Services</strong>: Services such as advertisement, co-branding, marketing & promotion, and technology support provided by distributors to the voucher issuer are liable to GST at the applicable rate.</span></li><li><span><strong>Unredeemed Vouchers (Breakage)</strong>: The value of unredeemed vouchers at their expiry period is not considered a supply of goods or services and hence not subject to GST. The amount attributable to unredeemed vouchers cannot be construed as consideration for any supply.</span></li></ol><p><span>This circular aims to resolve ambiguities and ensure a uniform approach to the GST treatment of vouchers, thus providing clear guidance to the trade and industry.</span> <a href="https://cms.plasament.com/storage/circular-no-243-2024.pdf">circular-no-243-2024</a><br> </p>