1. TYPES OF E-VOUCHERS - LIABILITY CHANGES

A. Closed Loop Voucher: Can be redeemed only at issuer. Eg: Kalyan Jewellers Gift Card, Amazon Closed Wallet.
Liability: Issuer is debtor. Not regulated by RBI as PPI, but regulated by Consumer Law.

B. Semi-Closed Loop Voucher: Redeemable at group of merchants. Eg: Sodexo Meal Pass, Amazon Pay, Flipkart Gift Card issued by Qwikcilver.
Liability: RBI Prepaid Payment Instruments Master Direction, 2021. Issuer needs RBI Authorization.

C. Open Loop Voucher: Redeemable anywhere - Visa/ Mastercard gift card.
Liability: RBI + Payment and Settlement Systems Act, 2007. Full KYC required.

D. GST Law Classification: Single-purpose vs Multi-purpose voucher - Sec 12(4) CGST Act.

2. RBI LAW ON LIABILITY & REDEMPTION - MOST IMPORTANT

Master Direction on Issuance and Operation of PPIs, 2021 [Updated 2024] + Draft 2026:

For Gift PPI - Electronic Vouchers:

1. Maximum value: Rs 10,000 per instrument [Rs 20,000 in draft 2026].
2. Minimum validity: 1 year - Mandatory. Issuer cannot give 3 months, 6 months expiry.[Validity][Value]
3. Maximum validity: 1 year earlier, now allowed to be revalidated. After expiry, customer can get refund / revalidation.
4. Cannot be issued in paper voucher form. Must be electronic.[PPI]
5. Non-reloadable, Cash-out not permitted - except for regulatory refund.
6. Liability: Issuer is liable to redeem at par value till validity. If merchant refuses, issuer must refund.
7. Inactive: If no transaction for 1 year, PPI classified as inactive. Amount must be kept in escrow, not forfeited.[Expiry]

Escrow Mechanism: Full outstanding liability of e-voucher issuer must be kept in escrow account with bank. Even if issuer goes bankrupt, customer money safe.

Liability for Fraud: Under RBI Circular on Customer Protection 06.07.2017, if e-voucher fraudulently redeemed due to issuer's security lapse, issuer liable. Zero liability if customer reports within 3 days.

3. CONTRACT & CONSUMER LAW

Under Indian Contract Act, 1872: E-voucher is a debt instrument acknowledging debt.

Madras High Court - Tvl. Kalyan Jewellers India Ltd Vs Union of India [W.P. 27 Nov 2023] - LANDMARK ON VOUCHER LIABILITY

Court held:

"Gift Voucher/Card thus acknowledges debt. Thus, Gift Voucher/Card is nothing but a debt instrument. If the petitioner commits a breach or fails to allow such redemption, such customer would have right to enforce. Customer can rightfully approach Civil Court if petitioner denies redemption at time of sale or denies to credit amount after expiry if voucher not redeemed."

Ratio:

• E-voucher creates enforceable right - actionable claim.
• Expiry clause that forfeits money is unfair contract under Consumer Protection Act 2019 Sec 2(46).
• Issuer cannot say "expired, money lapsed". Must refund or extend.

Consumer Protection Case Law:

Sodexo Vs Central Govt + Multiple NCDRC Cases on Gift Vouchers:

• Charging fee for non-redemption, imposing expiry less than 1 year, refusing to redeem due to technical glitch = Deficiency in service + Unfair Trade Practice.
• NCDRC in Big Bazaar Gift Voucher Case 2019 held forfeiture of unredeemed gift voucher amount is illegal. Directed refund with 12% interest + compensation.

Karnataka High Court - Vouchers are Neither Goods Nor Services Till Redemption 2023

Held voucher remains actionable claim till redemption. No GST on issue if goods not identified.

4. GST LAW - WHEN TAX APPLIES - REDEMPTION IS KEY

This is most litigated.

Madras High Court - Kalyan Jewellers Case + AAR / AAAR:

Two types under CGST Act Sec 12(4):

A. Single Purpose Voucher [Specific Goods Identified]:
Example: Voucher for "1 Gold Coin of 10gms" or "iPhone 14".
Time of Supply = Date of Issue of voucher. GST payable on issue.

B. Multi Purpose Voucher [Goods/Services Not Identified]:
Example: Rs 5000 Amazon Pay Gift Card can be used for anything.
Time of Supply = Date of Redemption by customer. No GST on issue. GST on redemption based on goods purchased.[identified]

AAAR Karnataka 2022: "Voucher in hands of appellant does not settle obligation but creates obligation and cannot be termed as money. Settlement occurs at time when ultimate beneficiary uses voucher. Until then it is just instrument recognised by RBI but is not money."

Income Tax - Edenred India P Ltd Vs DCIT [ITAT 24 Feb 2016]
Year wise details of redemption can be denied after expiry period. Breakage income [unredeemed vouchers] taxable as business income in year of expiry.

5. US / EU LAW COMPARISON FOR DRAFTING

US - CARD Act 2009: Gift card cannot expire within 5 years. No inactivity fee for 12 months.

EU - E-Money Directive 2009/110/EC: E-voucher issuer must redeem at par at any time.

India now moving to same - RBI Draft 2026 proposes gift PPI must be revalidatable and refundable.

6. SUMMARY - YOUR RIGHTS

If you are Customer whose e-voucher not redeemed:

1. Issuer must allow redemption for minimum 1 year from issue.[Validity]
2. Even after expiry, you have right to seek refund / revalidation - forfeiture clause void - Kalyan Jewellers Madras HC.[Valid]
3. If issuer refuses: File complaint to RBI Ombudsman - Digital Transactions under Integrated Ombudsman Scheme 2021 + Consumer Commission for unfair trade practice.
4. No GST can be charged twice.

If you are Issuer [Company issuing e-vouchers]:

1. Take RBI Authorization if semi-closed.
2. Maintain escrow for 100% outstanding.
3. Do NOT write clause "No refund after expiry" - It will be struck down as per Kalyan Jewellers case.
4. Show breakage income only after 3 years as per Ind AS, offer GST at redemption.
5. Keep video / electronic logs of redemption with 65B certificate.