SERIES II No. 41
PUBLISHED BY AUTHORITY
RNI No. GOAENG/2002/6410
Reg. No. RNP/GOA/32/2024-2026
Panaji, 13th January, 2025 (Pausa 23, 1946)
GOVERNMENT OF GOA
Department of Finance
Office of the Commissioner of Commercial Taxes
——
No. CCT/26-4/2024-25/G/4348
Subject: Clarification in respect of input tax credit
availed by electronic commerce operators
where services specified under Section 9(5)
of Central Goods and Services Tax Act, 2017
are supplied through their platform-reg.
Ref.: Circular No. 240/34/2024-GST dated 31st
December, 2024 issued under Central Goods and
Services Tax Act, 2017 by the GST Policy Wing,
Central Board of Indirect Taxes and Customs,
Department of Revenue, Ministry of Finance,
Government of India, New Delhi.
Circular
(No. 32/2024-25-GST)
The GST Policy Wing, Central Board of Indirect
Taxes & Customs, Department of Revenue, Ministry of
Finance, Government of India, New Delhi has issued
the above referred Circular.
For the uniformity in implementation and in
exercise of the powers conferred under Section 168 of
the Goa Goods and Services Tax Act, 2017 (Goa Act 4
of 2017) it is hereby directed that the said Circular
issued by the GST Policy Wing, Central Board of
Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, Government of India
shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services
Tax Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached
herewith as Annexure.
Difficulty, if any, in implementation of this
circular may please be brought to the notice of
the undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State
Taxes, Goa.
Panaji, 13th January, 2025.
——
ANNEXURE
Circular No. 240/34/2024-GST
F. No. CBIC-20001/14/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
North Block, New Delhi, dated the 31st
December, 2024
To,
The Principal Chief Commissioners/Chief
Commissioners of Central Tax (All).
=Suggestions are welcomed on e-mail: [email protected]
855
EXTRAORDINARY
No. 2
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 41
(EXTRAORDINARY No. 2)
13TH JANUARY, 2025
856
The Principal Directors General/Directors
General (All).
Madam/Sir,
Sub.: Clarification in respect of input tax credit
availed by electronic commerce operators
where services specified under Section 9(5) of
Central Goods and Services Tax Act, 2017 are
supplied through their platform-reg.
Reference is invited to Circular No. 167/23/2021-
-GST dated 17-12-2021 which clarified that
electronic commerce operators (hereinafter referred
to as “ECOs”) required to pay tax under Section 9(5)
of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”) are not
required to reverse Input Tax Credit (ITC) in respect
of supply of restaurant services through their
platform [notified services under Section 9(5)]. In
this regard, representations have been received
seeking clarification regarding requirement of
reversal of ITC, if any, in respect of supply of
services, other than restaurant services, under
Section 9(5) of CGST Act.
2. The issue has been examined and to ensure
uniformity in the implementation of the law across
the field formations, the Board, in exercise of its
powers conferred under Section 168(1) of the CGST
Act, hereby clarifies the issue as below:
Sr. No.
Issue
Clarification
1
2
3
1.
Whether electronic commerce operator,
required to pay tax under Section 9(5)
of CGST Act, is liable to reverse
proportionate input tax credit on his
inputs and input services to the extent
of supplies made under Section 9(5) of
the CGST Act
1.
ECO, required to pay tax under Section 9(5)
of CGST Act, is making supplies under two
counts:
i.
Supplies notified under Section 9(5) of
CGST Act for which he is liable to pay tax
as if he is the supplier of the said services.
ii.
Supply of his own services by providing
his electronic platform for which he
charges platform fee /commission etc.
from the platform users.
2.
For providing the services mentioned at 1 (ii)
above, the ECO procures inputs as well as
input services for which he avails Input Tax
Credit.
3.
It has been clarified vide question No. 6 of
Circular No. 167/23/2021-GST dated 17-12-2021
that the ECO shall not be required to reverse
input tax credit on account of restaurant
services on which he pays tax under Section 9(5)
of the CGST Act. It has also been clarified
that the input tax credit will not be allowed
to be utilized for payment of tax liability under
Section 9(5) and whole of the tax liability
under Section 9(5) will be required to be paid
in cash.
4.
The principle, which has been outlined in
question No. 6 of Circular No. 167/23/2021-GST
dated 17-12-2021 also applies to the supplies
made in respect of other services specified
under Secton 9(5) of CGST Act.
5.
In view of this, it is clarified that Electronic
Commerce Operator, who is liable to pay tax
under Section 9(5) of the CGST Act in respect
of specified services, is not required to reverse
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857
1
2
3
the input tax credit on his inputs and input
services proportionately under Section 17(1)
or Section 17(2) of CGST Act to the extent of
supplies made under Section 9(5) of the CGST Act.
6.
It is further clarified that ECO will be
required to pay the full tax liability on
account of supplies under Section 9(5) of the
CGST Act only through electronic cash ledger.
The credit availed by him in relation to the
inputs and input services used to facilitate
such supplies cannot be used for discharge of
such tax liability under Section 9(5) of the
CGST Act. However, such credit can be
utilized by him for discharge of tax liability in
respect of supply of services on his own
account.
3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
4. Difficulty, if any, in implementation of this Circular may be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal) Principal Commissioner (GST).
————
No. CCT/26-4/2024-25/G/4349
Subject:
Clarification on availability of input tax
credit as per Clause (b) of sub-section (2)
of Section 16 of the Central Goods and
Services Tax Act, 2017 in respect of goods
which have been delivered by the
supplier at his place of business under
Ex-Works Contract-reg.
Ref.: Circular No. 241/35/2024-GST dated 31st
December, 2024 issued under Central Goods
and Services Tax Act, 2017 by the GST Policy
Wing, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of
Finance, Government of India, New Delhi.
Circular
(No. 33/2024-25-GST)
The GST Policy Wing, Central Board of Indirect
Taxes & Customs, Department of Revenue, Ministry
of Finance, Government of India, New Delhi has
issued the above referred Circular.
For the uniformity in implementation and in
exercise of the powers conferred under Section 168
of the Goa Goods and Services Tax Act, 2017 (Goa
Act 4 of 2017) it is hereby directed that the said
Circular issued by the GST Policy Wing, Central
Board of Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, Government of India
shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached
herewith as Annexure.
Difficulty, if any, in implementation of this circular
may please be brought to the notice of the
undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State
Taxes, Goa.
Panaji, 13th January, 2025.
——
ANNEXURE
Circular No. 241/35/2024-GST
F. No. CBIC-20001/14/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
North Block, New Delhi, dated the 31st
December, 2024
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 41
(EXTRAORDINARY No. 2)
13TH JANUARY, 2025
858
To,
The Principal Chief Commissioners/ Chief
Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject:
Clarification on availability of input tax
credit as per Clause (b) of sub-section (2)
of Section 16 of the Central Goods and
Services Tax Act, 2017 in respect of goods
which have been delivered by the
supplier at his place of business under
Ex-Works Contract-reg.
Reference has been received from automobile
sector seeking clarification on availability of input
tax credit (hereinafter referred to as “ITC”) as per
Clause (b) of sub-section (2) of Section 16 of the
Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”) in respect of
goods which have been delivered by the supplier at
his place of business under Ex-Works Contract.
1.2 It has been stated that in automobile sector,
the contract between the automobile dealers and
the Original Equipment Manufacturers (OEMs) is
generally an Ex-Works (EXW) contract, and as per
the terms of the contract, the property in goods (i.e.
vehicles) passes to the dealer at the factory gate of
the OEM, when the goods are handed over to the
transporter at the instance of the dealer, and the
delivery on the part of the OEM is complete at his
factory gate. The transport may be arranged by the
OEM on behalf of the dealer and where insurance
is arranged, it may also be done on behalf of the
dealer. Any claim in case of loss has to be lodged by
the dealer. The dealer also duly accounts for the
invoice in his books of accounts on such delivery of
the vehicles at the factory gate of the OEM. The
dealer avails ITC on the date the vehicles are billed
to him and handed over to the transporter by the
OEM at his factory gate. However, some field
formations are taking a view that ITC can be availed
by the dealer only after the vehicles are physically
received by him at his business premises and show
cause notices have been issued to a number of
dealers, demanding tax for wrongful availment of
ITC for contravention of provisions of Clause (b) of
sub-section (2) of Section 16 of the CGST Act.
2. In order to ensure uniformity in the
implementation of the provisions of law across the
field formations, the Board, in exercise of its powers
conferred by sub-section (1) of Section 168 of the
CGST Act, hereby clarifies the issue as below.
3. Sub-section (2) of Section 16 of the CGST Act
is a non-obstante clause to Section 16 of the CGST
Act which enlists the conditions, failing which the
registered person is not entitled to ITC in respect of
supply of goods or services or both. One of the
conditions as per Clause (b) of the said sub-section
(reproduced below) is that a registered person is
not entitled to claim ITC in respect of any supply of
goods or services or both unless he has “received”
the said goods or services or both. The Explanation
to the said clause provides for deemed receipt of
goods and services in certain scenarios.
“Section 16. Eligibility and conditions for taking
input tax credit.
......
(2) Notwithstanding anything contained in this
section, no registered person shall be entitled to the
credit of any input tax in respect of any supply of
goods or services or both to him unless,—
......
(b) he has received the goods or services or both.
Explanation.— For the purposes of this clause, it
shall be deemed that the registered person has
received the goods or, as the case may be, services—
(i) where the goods are delivered by the supplier to
a recipient or any other person on the direction of
such registered person, whether acting as an agent
or otherwise, before or during movement of goods,
either by way of transfer of documents of title to
goods or otherwise;
(ii) where the services are provided by the supplier
to any person on the direction of and on account of
such registered person;
…”
3.1
From a plain reading of the Clause (b) of
sub-section (2) of Section 16 of the CGST Act, it is
quite apparent that there is no reference of any
particular place where goods are required to be
“received” by the registered person. This is in
contrast to the erstwhile Central Excise regime,
where the provisions contemplated physical receipt
of the goods at the factory of the manufacturer for
taking CENVAT credit on the said goods. In most of
the State VAT Acts, the provisions related to credit
of the input tax did not have any explicit mention
of physical receipt of goods at any particular place
and input tax credit was allowed on purchase of
goods.
3.2 Explanation to Clause (b) of sub-section (2) of
Section 16 of the CGST Act provides that the goods
would be deemed to have been “received” by the
registered person for the purpose of this clause,
where:
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859
a) the goods are delivered by the supplier to a
recipient or to any other person on the
direction of such registered person, whether
acting as an agent or otherwise;
b) such direction may be given before or during
movement of goods; and
c) the goods may be delivered either by way of
transfer of documents of title to goods or
otherwise.
3.2.1 The said Explanation provides that where
goods are delivered by the supplier to any other
person, whether acting as an agent or not, upon the
direction of the registered person, and where such
delivery occurs either through transfer of documents
of title to goods or otherwise, the registered person
is deemed to have “received” such goods for the
purpose of the Clause (b) of sub-section (2) of Section 16
of CGST Act. Accordingly, in cases where goods are
delivered by the supplier to the registered person,
either directly or to any other person on the
directions of the said registered person, the
registered person shall be considered to have
“received” the said goods for the purpose of
Clause (b) of sub-section (2) of Section 16 of CGST
Act.
3.3 In the instant case, as per the terms of the
EXW contract between the dealer and the OEM:
a) the goods are being handed over by the OEM
to the transporter at his factory gate for
onward transmission to the dealer;
b) transport is arranged by OEM on the behalf of
dealer; and
c) if insurance is arranged, it is done on the behalf
of dealer and any claim in case of loss has to
be lodged by the dealer.
3.3.1 In such a scenario, the property in the said
goods can be considered to have been passed on to
the dealer by the OEM upon handing over of the
said goods to the transporter at his factory gate,
meaning thereby that the goods can be considered
to have been delivered to the registered person (the
dealer), through the transporter, by the supplier (the
OEM) at his factory gate and the supply of the said
goods can be considered to have fructified at the
factory gate of the OEM, even though the goods
may be physically received by the registered person
(the dealer) after the transit period. Accordingly, it
is clarified that as per Explanation to Clause (b) of
sub-section (2) of Section 16 of CGST Act, the
registered person (the dealer) can be considered to
have “received” the said goods at the time of such
handing over of the goods by the supplier to the
transporter, at his factory gate, for their onward
transmission to the said registered person (the
dealer).
3.4
The same principle is applicable in respect
of supply of other goods also where the contract
between the supplier and recipient is an EXW
contract, and as per terms of the contract, the goods
are to be delivered by the supplier to the recipient,
or to any other person (including a transporter) on
behalf of the recipient, at his (supplier’s) place of
business and the property in the goods stands
transferred to the recipient at the time of such
handing over. In such cases, the said goods can be
construed to have been “received” by the said
recipient at the time of handing over the said goods
to the recipient or to the transporter, as the case
may be, as per provisions of Clause (b) of sub-section (2)
of Section 16 of CGST Act.
3.5 It is also mentioned that as per provisions of
sub-section (1) of Section 16 of the CGST Act, a
registered person is entitled to input tax credit only
in respect of supply of goods or services or both,
which is used or intended to be used in the course
or furtherance of business. Therefore, the input tax
credit may be available to the registered person on
such receipt of goods by the said registered person
from the supplier at his (supplier’s) factory gate or
business premises, subject to fulfilment of other
conditions of Section 16 and Section 17 of CGST
Act, including the condition that the said goods are
used or intended to be used in the course or
furtherance of business by the said registered
person.
3.6 It is also to be noted that if the goods are
found to have been diverted for non-business
purposes at any stage, either before physically
receiving the said goods at his business premises or
subsequently, the registered person shall not be
entitled to input tax credit on such goods in terms
of sub-section (1) of Section 16 of CGST Act. Further,
if at any time after “receiving” the goods, such
goods are lost, stolen, destroyed, written off or
disposed of by way of gift or free samples, the
registered person would not be entitled to the input
tax credit in respect of such goods as per provisions
of Clause (h) of sub-section (5) of Section 17 of CGST
Act.
4. It is requested that suitable trade notices may
be issued to publicize the contents of this Circular.
5. Difficulty, if any, in the implementation of this
Circular may be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal) Principal Commissioner (GST).
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 41
(EXTRAORDINARY No. 2)
13TH JANUARY, 2025
860
No. CCT/26-4/2024-25/G/4350
Subject:
Clarification on place of supply of Online
Services supplied by the suppliers of
services to unregistered recipients-reg.
Ref.: Circular No. 242/36/2024-GST dated 31st
December, 2024 issued under Central Goods
and Services Tax Act, 2017 by the GST Policy
Wing, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of
Finance, Government of India, New Delhi.
Circular
(No. 34/2024-25-GST)
The GST Policy Wing, Central Board of Indirect
Taxes & Customs, Department of Revenue, Ministry
of Finance, Government of India, New Delhi has
issued the above referred Circular.
For the uniformity in implementation and in
exercise of the powers conferred under Section 168
of the Goa Goods and Services Tax Act, 2017 (Goa
Act 4 of 2017) it is hereby directed that the said
Circular issued by the GST Policy Wing, Central
Board of Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, Government of India
shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached
herewith as Annexure.
Difficulty, if any, in implementation of this circular
may please be brought to the notice of the
undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State
Taxes, Goa.
Panaji, 13th January, 2025.
——
ANNEXURE
Circular No. 242/36/2024-GST
F. No. CBIC-20001/14/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
North Block, New Delhi, dated the 31st
December, 2024
To,
The Principal Chief Commissioners/ Chief
Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Sub.: Clarification on place of supply of Online
Services supplied by the suppliers of services
to unregistered recipients-reg.
References have been received from field
formations regarding non-compliance of provisions
of mandatory recording of correct place of supply
on the invoices by the suppliers in respect of online
services provided by them, either themselves or
through electronic commerce operators, to
unregistered recipients due to wrong interpretation
of provisions of Section 12(2)(b) of Integrated Goods
and Services Tax Act, 2017 (hereinafter referred to
as “IGST Act”) read with Rule 46 of Central Goods
and Services Rules, 2017 (hereinafter referred to as
“CGST Rules”). It has also been mentioned that
though in such cases of taxable online supplies of
services to unregistered recipients, registered
suppliers are required to mention State name of the
recipient on the invoice, irrespective of the value of
such supply, and declare place of supply of such
services as the State of the recipient as per the
provisions of Clause (i) of Section 12(2)(b) of IGST
Act but many suppliers are not recording the State
name of the unregistered recipient on the invoice
and are declaring place of supply of such services
as the location of the supplier as per Clause (ii) of
Section 12(2)(b) of IGST Act. This is resulting in
wrong declaration of place of supply, resulting in
flow of revenue in respect of the said supply to the
wrong State. Request has been made to clarify the
issue so as to ensure correct declaration of place of
supply by the suppliers of such services to
unregistered recipients.
2. In order to clarify the issue and to ensure
uniformity in the implementation of the provisions
of the law across field formations, the Board, in
exercise of its powers conferred by Section 168(1) of
the Central Goods and Services Act, 2017
(hereinafter referred to as “CGST Act”) hereby
issues the following clarification.
3. Legislative provisions:
3.1 As per sub-section (17) of Section 2 of the
IGST Act, ‘online information and database access
or retrieval services’ means:
“services whose delivery is mediated by
information technology over the internet or an
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electronic network and the nature of which renders
their supply impossible to ensure in the absence of
information technology and includes electronic
services such as,—
(i)
advertising on the internet;
(ii)
providing cloud services;
(iii)
provision of e-books, movie, music, software
and other intangibles through telecommuni-
cation networks or internet;
(iv)
providing data or information, retrievable or
otherwise, to any person in electronic form
through a computer network;
(v)
online supplies of digital content (movies,
television shows, music and the like);
(vi)
digital data storage; and
(vii)
online gaming, excluding the online money
gaming as defined in Clause (80B) of
Section 2 of the Central Goods and Services Tax
Act, 2017 (12 of 2017);”
3.2 The term ‘electronic Commerce’ has been
defined under Section 2(44) of CGST Act, as follows:
“electronic commerce” means the supply of goods
or services or both, including digital products over
digital or electronic network;
3.3 The term ‘electronic commerce operator’ has
been defined under Section 2(45) of CGST Act, as
follows:
“electronic commerce operator” means any person
who owns, operates or manages digital or electronic
facility or platform for electronic commerce;
3.4 Sub-section (2) of Section 12 of the IGST Act,
reads as follows:
“(2) The place of supply of services, except the
services specified in sub-section (3) to (14),—
(a) made to a registered person shall be the location
of such person;
(b) made to any person other than a registered
person shall be,—
(i) the location of the recipient where the address
on record exists; and
(ii) the location of the supplier of services in other
cases.”
3.5 As per sub-section (2) of Section 31 of the
CGST Act,
“(2) A registered person supplying taxable services
shall, before or after the provision of service but
within a prescribed period, issue a tax invoice,
showing the description, value, tax charged thereon
and such other particulars as may be prescribed:”
3.6 Rule 46 of CGST Rules provides as below:
“46. Subject to Rule 54, a tax invoice referred to in
Section 31 shall be issued by the registered person
containing the following particulars, namely,—
…
(f) name and address of the recipient and the
address of delivery, along with the name of the State
and its code, if such recipient is unregistered and
where the value of the taxable supply is less than
fifty thousand rupees and the recipient requests that
such details be recorded in the tax invoice;
Provided that in cases involving supply of online
money gaming or in cases that where any taxable
service is supplied by or through an electronic
commerce operator or by a supplier of online
information and database access or retrieval services
to a recipient who is unregistered, irrespective of the
value of such supply, a tax invoice issued by the
registered person shall contain the name of the State
of the recipient and the same shall be deemed to be
the address on record of the recipient;
…”
4. Clarification:
4.1 Section 12 of the IGST Act provides that
except in cases specified in sub-sections (3) to (14)
of the said section, when the services are supplied
to a registered person, the place of supply of
services shall be the location of the recipient and
when the services are supplied to an unregistered
person, the place of supply of the said services shall
be the location of the recipient, if his address is
available on record, and shall be the location of the
supplier, if the address is not available on record.
4.2 Section 31 (2) of the CGST Act provides that
a registered person providing taxable services must
issue a tax invoice with details like the service
description, value, tax charged and such other
particulars as may be prescribed.
4.3 Rule 46 of CGST Rules provides the particulars
required to be mentioned on the tax invoice. Clause (f)
of the said rule provides for mentioning some details
on the invoice in case of supplies made to
unregistered recipient. Further, proviso to Clause (f)
of Rule 46 of the CGST Rules provides that in cases
involving the supply of online money gaming or
involving supply of any taxable services by or
through an electronic-commerce operator or by a
supplier of online information and database access
or retrieval services, to an unregistered recipient,
irrespective of the value of the said supply, the tax
invoice issued by the registered supplier must
contain the recipient’s State name. It has also been
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provided in the said proviso that such State name
shall be deemed to be the address on record of the
recipient.
4.4 A conjoint reading of Clause (b) of sub-section (2)
of Section 12 of the IGST Act, sub-section (2) of
Section 31 of the CGST Act and proviso to Rule 46(f)
of CGST Rules leads to a conclusion that in respect
of supply of services made to unregistered persons,
irrespective of the value of the said supply, the
supplier is required to mandatorily record the name
of the State of the unregistered recipient on the tax
invoice, in cases involving supply of online money
gaming or supply of taxable services by or through
an electronic commerce operator or supply of online
information and database access or retrieval
(OIDAR) services. Recording of the name of State of
the unregistered recipient on the tax invoice in
respect of such supply of services shall be deemed
as the address on record of the recipient for the
purpose of determination of place of supply of the
said services under Section 12(2)(b) of IGST Act.
Accordingly, in such cases, the place of supply of
such services shall be considered as the location of
the recipient of the services as per provisions of
Clause (i) of Section 12(2)(b) of IGST Act.
4.5 It is also observed that a combined reading of
the definitions of ‘electronic commerce’ and
‘electronic commerce operator’ as per Section 2(44)
and Section 2(45) of CGST Act, along with Rule 46(f)
of CGST Rules, leads to an understanding that all
services supplied to unregistered recipients over
digital or electronic network, either by the supplier
using his own digital or electronic facility/platform
or through any other electronic or digital platform
owned and operated by an independent electronic
commerce operator, will be covered under proviso
to Rule 46(f) of CGST Rules.
4.5.1 It is, accordingly, clarified that provisions or
proviso to Rule 46(f) of CGST Rules shall be
applicable in respect of all the online supplies of
services supplied to an unregistered recipient, in
addition to the supply of online money gaming and
OIDAR services. Some of the examples of such
services are subscription of e-newspapers and
e-magazines, online subscription of entertainment
services (e.g. OTT platforms), online Telecom
services, digital services through mobile
applications etc. Therefore, in respect of supply of
any such online digital services, OIDAR services
and online money gaming to unregistered
recipients, the suppliers are mandatorily required
to record the name of the State of the recipient on
the tax invoice, irrespective of the value of supply
of such services, and to declare place of supply of
the said services as the location of the recipient
(based on the name of State of the recipient) in their
details of outward supplies in FORM GSTR-1/1A.
4.5.2 For the purpose of recording the name of
the State of the recipient on tax invoice in respect
of such supplies made to unregistered persons for
such online services, supplier should devise suitable
mechanism to ensure collection of such details from
unregistered recipient before making any supplies
to him. As mentioned above, in such cases, the name
of the State of the recipient so recorded shall be
deemed to be the address of recipient available on
record and thus, for determining place of supply of
the said services, provisions of Section 12(2)(b)(i) of
IGST Act will be applicable as per which the place
of supply shall be the location of the recipient.
4.5.3 It is also mentioned that if the supplier fails
to issue invoice in accordance with the said
provisions by not recording correct mandatory
particulars, including recording of name of State of
unregistered recipient in respect of such supplies,
he may be liable to penal action under the
provisions of Section 122(3)(e) of CGST Act.
5. It is requested that suitable trade notices may
be issued to publicize the contents of this Circular.
6. Difficulty, if any, in the implementation of this
circular may be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal) Principal Commissioner (GST).
————
No. CCT/26-4/2024-25/G/4351
Subject:
Clarification on various issues pertaining
to GST treatment of vouchers-reg.
Ref: Circular No. 243/37/2024-GST dated 31st
December, 2024 issued under Central Goods
and Services Tax Act, 2017 by the GST Policy
Wing, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of
Finance, Government of India, New Delhi.
Circular
(No. 35/2024-25-GST)
The GST Policy Wing, Central Board of Indirect
Taxes & Customs, Department of Revenue, Ministry
of Finance, Government of India, New Delhi has
issued the above referred Circular.
For the uniformity in implementation and in
exercise of the powers conferred under Section 168
of the Goa Goods and Services Tax Act, 2017 (Goa
Act 4 of 2017) it is hereby directed that the said
Circular issued by the GST Policy Wing, Central
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Board of Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, Government of India
shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached
herewith as Annexure.
Difficulty, if any, in implementation of this circular
may please be brought to the notice of the
undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State
Taxes, Goa.
Panaji, 13th January, 2025.
——
ANNEXURE
Circular No. 243/37/2024-GST
F. No. CBIC-20001/14/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
North Block, New Delhi, dated the 31st
December, 2024
To,
The Principal Chief Commissioners/ Chief
Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: Clarification on various issues pertaining
to GST treatment of vouchers- reg.
References have been received from the trade
and industry as well as the field formations seeking
clarity on various issues with respect to vouchers
such as whether transactions in voucher are a
supply of goods and/or services, whether GST is
leviable on trading of vouchers by distributor/sub-
-distributor and whether unredeemed vouchers
(breakage) are taxable. It has been represented that
the field formations are taking different views on
these issues leading to ambiguity and litigations.
2. Accordingly, in view of the difficulties being
faced by the trade and industry and to ensure
uniformity in the implementation of the provisions
of the law across field formations, the Board, in
exercise of its powers conferred by Section 168 (1)
of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”), hereby
clarifies the issues, as below.
3. Issue 1-Whether “transactions in vouchers”
falls under the category of supply of goods and/or
services?
3.1 The relevant legal provisions of CGST Act,
2017 are as under:
(i) Section 2(52)— “goods” means every kind of
movable property other than money and securities
but includes actionable claim, growing crops, grass
and things attached to or forming part of the land
which are agreed to be severed before supply or
under a contract of supply.
(ii) Section 2(102)— “services” means anything
other than goods, money and securities but includes
activities relating to the use of money or its
conversion by cash or by any other mode, from one
form, currency or denomination to another form,
currency or denomination for which a separate
consideration is charged.
Explanation.— For the removal of doubts, it is
hereby clarified that the expression “services”
includes facilitating or arranging transactions in
securities.
(iii) Section 2(118)– “voucher” means an
instrument where there is an obligation to accept it
as consideration or part consideration for a supply of
goods or services or both and where the goods or
services or both to be supplied or the identities of
their potential suppliers are either indicated on the
instrument itself or in related documentation,
including the terms and conditions of use of such
instrument.
(iv) Section 2(75)— “money” means the Indian
legal tender or any foreign currency, cheque,
promissory note, bill of exchange, letter of credit,
draft, pay order, traveller cheque, money order, postal
or electronic remittance or any other instrument
recognized by the Reserve Bank of India when used
as a consideration to settle an obligation or exchange
with Indian legal tender of another denomination
but shall not include any currency that is held for its
numismatic value.
(v) Section 2(1)— “actionable claim” shall have the
same meaning as assigned to it in Section 3 of the
Transfer of Property Act, 1882 (4 of 1882).
Section 3 of the Transfer of Property Act, 1882
provides the definition of “actionable claim” as
below:-
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“actionable claim” means a claim to any debt’ other
than a debt secured by mortgage of immovable
property or by hypothecation or pledge of movable
property, or to any beneficial interest in movable
property not in the possession, either actual or
constructive, of the claimant, which the Civil Courts
recognize as affording grounds for relief, whether
such debt or beneficial interest be existent, accruing,
conditional or contingent;”
(vi) Section 2(102A)— “specified actionable claim”
means the actionable claim involved in or by way
of— (i) betting; (ii) casinos; (iii) gambling; (iv) horse
racing; (v) lottery; or (vi) online money gaming”.
(vii) Section 7—
“…
(2)— Notwithstanding anything contained in sub-
-section (1),
(a) activities or transactions specified in Schedule III;;
or
…
shall be treated neither as a supply of goods nor
a supply of services.”
(viii) Schedule III to the CGST Act deals with
“Activities or Transactions which shall be treated
neither as a supply of Goods nor a supply of services:
…
6. Actionable claims, other than specified
actionable claims.
…
3.2 From the definition of voucher under Section 2(118)
of CGST Act, it emerges that
“voucher” may be in nature of payment
instrument which creates an obligation on the
supplier to accept it as a consideration or part
consideration for the supply of goods and/or
services. The issuance of payment instruments,
including pre-paid instruments, in India is regulated
by Reserve Bank of India (RBI) in terms of the
Payment and Settlement Act, 2007, RBI’s Master
Directions and the relevant Notifications/Circulars/
Communications issued by the RBI from time to time.
3.3 Pre-paid Instruments (PPIs) as defined by RBI
are payment instruments that facilitate purchase of
goods and/or services against the value stored on
such instruments. The value stored on such
instruments represents the value paid for by the
holder, by cash, by debit to a bank account, or by
credit card. The pre-paid instruments can be issued
as cards, wallets and in any such form/instrument
which can be used to access the PPI and to use the
amount therein. Further, as per Section 2(75) of CGST
Act, “money” includes an instrument recognized
by the Reserve Bank of India which is used as a
consideration to settle an obligation.
3.4 On combined reading of the definition of
“voucher” as per Section 2(118) of the CGST Act,
along with definition of “money” as per Section 2(75) of
the CGST Act and the description of “pre-paid
instruments” given by RBI, it emerges that where
the voucher is covered as a pre-paid instrument
recognized by the RBI and is used as a consideration
to settle an obligation, then in such cases, the
voucher will fall under the definition of “money”. In
such a case, as “money” is excluded from the
definition of goods and services as provided in
Section 2(52) and Section 2(102) of the CGST Act
respectively, the transactions in voucher would be
considered neither as a supply of goods nor as a
supply of services.
3.5. In cases, where voucher is not covered as a
pre-paid instrument recognized by RBI and hence,
cannot be treated as money, the voucher will be in
nature of an obligation on the supplier to receive it
as consideration or part consideration and assure
the beneficiary/voucher holder to claim certain
goods and/or services as specified on the voucher
or in the related documents. In such cases, the
voucher can be considered as an “actionable claim”
within the meaning of Section 2(1) of the CGST Act,
read with Section 3 of the Transfer of Property Act,
1882.
3.6 Further, as per entry 6 of Schedule III of CGST
Act, an activity or transactions of actionable claims,
other than specified actionable claims, is to be
treated neither as a “supply of goods” nor as a
“supply of services”. Further as per Section 2(102A)
of CGST Act, specified actionable claim means the
actionable claim involved in or by way of betting,
casinos, gambling, horse racing, lottery or online
money gaming. As vouchers are not covered under
definition of specified actionable claim, it appears
that they are covered in entry 6 of Schedule III of
CGST Act as actionable claims, other than specified
actionable claims. Therefore, it appears that even in
such a case, transaction in vouchers would be
treated neither as a “supply of goods” nor as a
“supply of services”.
3.7 Therefore, it is clarified that irrespective of
whether voucher is covered as a pre-paid
instrument recognized by RBI or not, the voucher is
just an instrument which creates an obligation on
the supplier to accept it as consideration or part
consideration and the transactions in voucher
themselves cannot be considered either as a supply
of goods or as a supply of services. However supply
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of underlying goods and/or services, for which
vouchers are used as consideration or part
consideration, may be taxable under GST.
Issue 2– What would be the GST treatment of
transactions in Vouchers by distributors/sub-
-distributors/agents etc.?
4.1 There are primarily two models for
distribution of vouchers through distributors/sub-
-distributors/agents, etc.
(i) Where vouchers are distributed through the
distributors/sub-distributors/dealers on Principal-
-to-Principal (P2P) basis.
(ii) Where vouchers are distributed using agents/
distributors/sub-distributors on commission/fee
basis.
4.2 Where vouchers are distributed through the
distributors/sub-distributors/dealers on Principal-
to-Principal(P2P) basis: In such cases, the
distributor/dealer purchases voucher from the
voucher issuer typically at a discounted rate and
subsequently sells the same to the sub-distributors,
corporates or end customers and generate revenue
through a trading margin, which is a difference
between the acquisition cost and the selling price
of the vouchers by the said distributor/dealer. In
such cases, distributors/dealers (including sub-
-distributors) own the vouchers and operate
autonomously with full control over the process from
purchase to the final sale of the vouchers to the end
user.
4.2.1 As per Section 9 (1) of CGST Act, GST is
chargeable on the supply of goods and/or services.
As the transaction in vouchers is neither supply of
goods nor supply of services, therefore, pure trading
of vouchers in this case would not constitute either
supply of goods or supply of services. Accordingly,
such trading of vouchers would not be leviable to
GST as per Section 9 (1) of CGST Act.
4.3 Where vouchers are distributed using
distributors/sub-distributors/agents on commission/
fee basis: In such cases, the transactions between
the voucher issuer and the distributors/sub-
-distributors/agents are on principal-agency basis.
These arrangements, as per contract/agreement
between distributor/sub-distributor/agents and the
voucher issuer may specify a set of obligations on
such agents such as marketing & promotion and
other related support activities for distribution of
vouchers against a commission/fee or any other
amount by whatever name called, for such purpose.
In such cases, distributors/sub-distributors/agents
do not operate autonomously, do not own the
vouchers and only act as agent of the voucher issuer.
In such cases, GST would be payable by such
distributor/sub-distributor/agent, acting as an
agent of the voucher issuer, on the commission/fee
or any other amount by whatever name called, for
such purpose, as a supply of services to the voucher
issuer.
Issue 3— What would be GST treatment of
additional services such as advertisement,
co-branding, marketing & promotion, customization
services, technology support services, customer
support services etc.
5.1 There may be cases where additional services
such as advertisement, co-branding, customization
services, technology support services, customer
support services, etc. are provided by either the
distributor/sub-distributor or by another person to
the voucher issuer against a service fee/service
charge/affiliate charge or any other amount, by
whatever name called, as per contract/agreement
between such service provider and the service
recipient (voucher issuer). In such a case, the said
service fee/service charge/affiliate charge or other
amount for supply of such additional services to
the voucher issuer as per the terms of contract/
/agreement, would be liable to GST at the
applicable rate in the hands of the said service
provider.
Issue 4— What would be the GST treatment of
unredeemed vouchers (breakage).
6.1 Sometimes, vouchers remain unused/
/unredeemed at the end of their expiry period. In
such cases, the businesses generally make book
adjustments and account the said amount on
account of unredeemed vouchers in their statement
of income. The value of such unredeemed vouchers
accounted for in the statement of income is called
breakage. There are ambiguities and doubts in
respect of GST treatment of such breakage. Also,
doubts are raised whether the amount attributed to
the unredeemed voucher (breakage) can be
considered as “monetary value of any act or
forbearance, ill respect of, in response to, or for the
inducement of the supply of goods or services or
both, whether by the recipient or by any other person”.
6.2 As per Section 9 (1) of the CGST Act, GST is
leviable only on the supply of goods and/or services.
In the case of breakage, there is no redemption of
voucher and there is no supply of underlying goods
and/or services. Therefore, there is no supply of
goods and/or services on account of such
unredeemed
vouchers
(breakage).
Also,
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“consideration” under GST is defined under Section 2 (31)
of CGST Act, in relation to the supply of goods or
services or both. As there is no underlying supply
of goods and/or services in case of non-redemption
of vouchers by the customer, the amount retained
for unredeemed vouchers by the voucher issuer
cannot be construed as consideration for any
supply. Accordingly, such amount attributable to
unredeemed vouchers (breakage) would not be
taxable as per the provisions of Section 9(1) of CGST
Act.
6.3 Further, Circular No. 178/10/2022-GST dated
03-08-2022 clarifies that agreement to do or refrain
from an act should not be presumed to exist, and
that there must be an express or implied agreement,
oral or written, to do or abstain from doing
something against payment of consideration, for a
taxable supply to exist. Considering the principle
laid out in the said circular, it emerges that where
the voucher is issued for the purpose or redemption
in respect of a supply of goods and/or services and
there is no express or implied agreement, oral or
written, between the issuer of voucher and
redeemer for payment of any amount or charges by
the redeemer to the voucher issuer in case of non-
redemption of the voucher, it cannot be considered
that non-redemption of voucher by the redeemer
tantamounts to supply of services. Therefore, it
appears that the amount attributable to non-
redemption of voucher (breakage) would not
constitute as a “monetary value of any act or
forbearance, in respect of, in response to, or for the
inducement of, the supply of goods or services or
both, whether by the recipient or by any other
person”. Therefore, no GST appears to be payable
on such amount attributable to non-redemption of
voucher (breakage).
7. It is requested that suitable trade notices may
be issued to publicize the contents of this Circular.
8. Difficulty, if any, in the implementation of this
Circular may be brought to the notice of the Board.
Hindi version will follow.
(Sanjay Mangal) Principal Commissioner (GST).
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