This GST Ruling, released on Wed 4.4.2012, deals with the GST implications of certain loyalty programs.
It considers the GST ramifications of: (i) the accrual of points by members; (ii) the loyalty program arrangements involving program partners; and (iii) the redemption of points and provision of rewards.
The Ruling states that when a member pays consideration for goods or services and gets points allocated to them in consequence, the member’s payment is consideration for the supply of the goods or services they acquire. Accordingly, there should not be an apportionment of the amount paid by the member between the goods or services and the points. There may be one or more supplies made by a loyalty program operator to a program partner, which are each addressed in the Ruling.
The Ruling was previously released as Draft GSTR 2011/D3 and is largely unchanged.
DATE OF EFFECT: Generally, the Ruling applies both before and after its date of issue, although it contains some “transitional provisions” which were not in the draft version.
[LTN 65, 4/4]