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The value of points forfeited of the applicant on which money has been paid by the issuer of points on account of failure of the end customers to redeem the payback points within their validity period is to be treated as "supply" of services

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Appellate Authority for Advance Ruling — Actionable Claim – The applicant is providing certain services to its clients/ partners by managing the programme which is based on issuance of reward points also known as payback points by the applicant to end customers. These reward payment points have value of 0.25 INR each. The applicant sought an advance ruling as to whether the value of points forfeited of the applicant on which money had been paid by the issuer of points on account of failure of the end customers to redeem the payback points within their validity period would amount to consideration for ‘actionable claim’ and whether the value of points forfeited of the applicant on which money has been paid by the issuer of points on account of failure of the end customers can be treated as “supply of any other goods or services and chargeable to GST. The AAR held that such amount would be considered as consideration and would be outside the actionable claim and further liable to GST. The appellant filed appeal against the said order.
Held that:- The Hon’ble Appellate Authority for Advance Ruling observed that when there are no claims by the end-customers after the expiry of validity period, these are no more actionable claims. These stand lapsed at the end of the Customers and Appellant treat the redeemed money as revenue which can never be described as any claim against anyone. Accordingly, dismiss the Appeal and uphold the Advance Ruling.—Loyalty Solutions And Research Private Limited, Gurugram, In Re… [2018] 5 TAXLOK.COM 105 (AAAR-Haryana)

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