India: Vouchers not subject to GST; “risky exporter” entitled to GST refund; dismissal held improper (court decisions)

The KPMG member firm in India prepared reports about three recent tax-related court decisions (read more at the hyperlinks provided below).

• Vouchers not subject to goods and services tax (GST): The Karnataka High Court held that gift vouchers, cash-back vouchers and e-vouchers supplied by the taxpayer were not subject to GST. The taxpayer procured such vouchers and then provided them to its customers, who then issued them to their employees in the form of incentives or to other beneficiaries under promotional schemes. The court found that the vouchers were neither goods nor services and were more akin to money or a deposit and had no intrinsic value of their own. The case is: Premier Sales Promotion Pvt Limited v. Union Of India & Ors. Read a February 2023 report [PDF 411 KB]
  
  
• “Risky exporter” entitled to provisional refund of 90% of integrated GST (IGST): The Gujarat High Court held that the taxpayer was entitled to a provisional refund of 90% of IGST because it provided all relevant information to the tax authority in a timely manner. The taxpayer was engaged in the business of manufacturing and exporting organic pigments, and it was deemed a “risky exporter” because a supplier to its supplier was deemed a “risky exporter.” Although the IGST refund is normally withheld in the case of a “risky exporter,” the court found that the taxpayer had otherwise complied with all its obligations, and it had no further obligation to verify the genuineness of a supplier to its supplier. The case is: Choksi Exports v. Union of India. Read a February 2023 report [PDF 410 KB]
  
  
• Dismissal on grounds that there was an alternative remedy available held improper: The Supreme Court held that the dismissal by the Punjab and Haryana High Court of the taxpayer’s case challenging the tax authority’s jurisdiction to sua sponte reopen an assessment order, on the grounds that there was an alternative remedy available, was improper. The case is: Godrej Sara Lee Ltd v. The Excise And Taxation Officer-Cum-Assessing Authority & Ors. Read a February 2023 report [PDF 363 KB]