Authority for Advance Ruling – GST on Pre-Paid Payment Instruments or Vouchers — The Petitioner sought quashing the Order passed by the Karnataka Appellate Authority for Advance Ruling. The petitioner sought an advance ruling as to whether the Pre-paid Payment Instruments [PPI] or vouchers themselves, or the act of supplying them is taxable, and at what stage, for each of the three categories of transactions undertaken by the assessee and if the transaction were liable to tax, under which category and what would be the rate of tax applicable. The AAR has ruled that the supply of vouchers is taxable as goods and the time of supply in all the three cases would be governed by Section 12(5) and the rate of GST be as per Entry No. 453 of Schedule 3 of Notification No. 1/2017- Central Tax(Rate) dated June 28, 2017. The petitioner challenged the said order before Karnataka Appellate Authority for Advance ruling and the Authority has affirmed the order passed by the AAR. The court observed that the vouchers involved are semi-closed PPIs in which the goods or services to be redeemed are not identified at the time of issuance. Vouchers are distributed to its employees or the customers which can be redeemed by them. These PPIs do not permit cash withdrawal, irrespective of whether they are issued by banks or non-banking Companies and they can be issued only with the prior approval of RBI. The transaction between the assessee and his clients is procurement of printed forms and their delivery. The printed forms are like currency. Therefore, the issuance of vouchers is similar to pre-deposit and not supply of goods or services. Hence, vouchers are neither goods nor services and therefore cannot be taxed.

Held that:- The Hon’ble High Court allowed the petition and set aside the order of AAR and the Appellate Authority.