GST liability on Loyalty earned against purchase of fuel, Goods and Services Tax - GST

[SUBRATA RAY]

A GTA receives loyalty point in monetary value against purchase of diesel for its vehicles. whether loyalty points earned in monetary value is liable for GST even though Diesel is still outside the purview of GST.

Posts / Replies

[Amit Agrawal]

Who is paying the 'loyalty points', on what purpose & what is the usage of these loyalty points? Moreover, it is unclear (at-least to me) whether the query raised is from point of view of receiver of loyalty points (i.e. GTA) or from point of provider (who-so it may be) of 'loyalty points'. 

Request you to kindly elaborate.

[KASTURI SETHI]

It is just like coupons. You may say sale-promotion of non-GST goods. Now how these coupons are redeemed by the buyer that matters i.e. determinant factor. 

Pl. elaborate your query for a comprehensive reply.

[SUBRATA RAY]

Loyalty points redeemed against purchase of NON GST supply I.e purchase of diesel

[KASTURI SETHI]

If loyalty points are redeemed within specified period, these are actionable claims and hence neither goods nor services are as per Schedule-III of CGST Act. However, if redeemed after expiry of the specified period i.e. validity period is over, it will not fall under the definition and scope of actionable claim. Then these will be classified under 'tolerating an act ' and will be taxable.

Pl. go through the following decisions of  AAR Haryana and  AAAR Haryana

(i) 2018 (7) TMI 1421 - AUTHORITY FOR ADVANCE RULING - HARYANA - IN RE : LOYALTY SOLUTIONS AND RESEARCH PRIVATE LIMITED

(ii) 2019 (2) TMI 1004 - APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA - IN RE : LOYALTY SOLUTIONS AND RESEARCH PVT. LTD.

[Shilpi Jain]

These loyalty points can be looked like one type of discount only. It should not entail any liabilities. Though it also depends on how this scheme is worded and given effect to.