Compliance guide · CBIC 243/37/2024
Settled at the end of 2024 and written into law in 2025: transactions in vouchers are not a supply of goods or services, so no GST applies to the voucher itself.
Reviewed September 2026. Not tax advice.
Voucher taxability was ambiguous for years, with conflicting advance rulings and a genuine risk of double taxation — once on the voucher and again on the goods it bought. The 55th GST Council meeting in December 2024 resolved it, and CBIC circular 243/37/2024 followed on 31 December 2024.
The Finance Act 2025 then removed the time-of-supply provisions for vouchers from sections 12 and 13 of the CGST Act altogether, since a voucher is now treated as a payment instrument rather than a supply.
| Type | Classification | GST |
|---|---|---|
| Prepaid instruments recognised by the RBI — gift cards, digital wallets | Treated as money | Not a supply. No GST. |
| Vouchers not issued as prepaid instruments | Actionable claims | Not a supply. No GST. |
Either way, the transaction in the voucher does not attract GST. The distinction matters for other regulatory purposes but not for this question.
Where a distributor buys vouchers from the issuer at a discount and sells them on to sub-distributors or customers on their own account, that is a principal-to-principal transaction and no GST arises on it. Where the distributor is acting as an agent under the issuer’s direction and does not own the vouchers, GST applies to their commission.
Breakage — the value of vouchers that expire without being used — is not taxable. Because nothing was redeemed, no underlying supply took place, and there is no express or implied agreement making the retained amount consideration for anything.
The income tax position is entirely separate. A voucher that attracts no GST can still be a taxable perquisite for an employee or trigger Section 194R for a channel partner. Do not read the GST clarification as a general tax exemption.
Section 194R on channel incentives · Employee gift thresholds
GST on vouchers is clear enough now that it should not shape how a programme is designed. The income tax side is not. A voucher carrying no GST still counts towards a dealer’s ₹20,000 under Section 194R and an employee’s ₹15,000 exemption — and those totals are cumulative across the year, held by nobody in particular. NeuroPX keeps both, and surfaces the breach at the approval step.