Clarifications by India's Central Board of Indirect Taxes and Customs (CBIC)

GST on Vouchers

• Transactions involving vouchers are not considered as supply of goods or services, hence, not liable to Goods and Services Tax (GST).
• GST applies to additional services related to vouchers, like marketing or commission-based distribution.
• Unredeemed vouchers, termed as 'breakage,' are not taxable as they do not represent consideration for any supply.

This clarification follows a decision by the GST Council, aimed at providing tax certainty and reducing litigation within the industry.

Input Tax Credit (ITC) on Ex-Works Contracts

• CBIC clarifies that businesses can claim ITC on goods purchased under "Ex-Works" contracts from the date on the invoice.
• In "Ex-Works" contracts, goods are considered delivered to the buyer once handed over to the transporter at the seller's factory gate.
• This clarification resolves confusion for industries like automotive, heavy engineering, and EPC contracts on claiming ITC.