The Appellate Authority for Advance Ruling (AAAR) has clarified the taxation situation regarding Tamil Nadu Bench Gift Cards and Vouchers. The bench has said that the goods and services received in lieu of them are not covered by cards or vouchers.

AAAR has ruled in this regard on the petition of Kalyan Jewelers. Kalyan Jewelers had appealed against the decision of the Authority for Advance Ruling (AAR), Tamil Nadu. The AAR had ruled to levy a GST at the rate of 12 percent on pre-paid instrumented paper vouchers, and 18 percent on vouchers or cards with a magnetic strip.

The AAAR amended the decision to clarify that there would be no GST on vouchers. Goods or services taken in lieu of that voucher will come under the purview of GST. AAAR stated that vouchers cannot be placed within the scope of goods or services. In the GST Act, it has been considered as the Instrument of Consideration for Future Supplies only.

Significantly, in the month of March, the GST collection reached a record high of Rs 1.23 lakh crore. It has a Central GST (CGST) of Rs 22,973 crore, States GST (SGST) of Rs 29,329 crore, Integrated GST (IGST) of Rs 62,842 crore, and Cess of Rs 8,757 crore (which includes Rs 935 crore on import of goods).

The recovery in GST revenue in the last five months is 27 percent more than the GST revenue in the month of March 2021.

The main reason for the increase in GST is surveillance against fake-billing using data from multiple sources including income tax and customs IT systems and effective tax administration. GST revenue during March 2021 is the highest since the introduction of GST.