Taxability on gift vouchers

This query is : Resolved

Raghavendra K S (Querist)
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10 March 2016 Suppose an agent purchases gift vouchers (multipurpose voucher) having value of Rs. 2000 each from Flipkart @ Rs.1800 and sold the same to company at @ Rs. 1900. Company distribute those gift voucher having value of Rs. 2000 each to its employee on some occasion and The gift voucher gives right to employees to claim them at Flipkart.com for shopping value of Rs. 2000 for any goods/services.

Now my query is,

1.What would be the taxability of tax (service tax/ VAT) on agent hands who earn Rs. 100 margin ?

CMA Vignesh R

CMA Vignesh R (Expert)
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10 March 2016 The Hon'ble High Court of Bombay in the matter of Sodexo SVC India Private Limited vs The State of Maharashtra and Ors., Writ Petition Nos. 5653 of 2010 and 7503 of 2013 on March 20, 2015 has decided that Sodexo vouchers which are printed on papers and are capable of being sold, delivered and possessed have its own utility are to be considered as goods.

Hence this gift vouchers having the similar characters should also be treated as goods.

Trading of goods is a service covered under the negative list (sec 66D) and hence no service tax in this case