Selling a standard gift card (one redeemable for a dollar value) is generally not a taxable sale: no GST is payable when the card is sold. The GST happens when the card is redeemed, following the normal rules of whatever is bought with it. Sell a $100 card today and the customer buys $100 of taxable goods next month: the GST belongs to that later sale, not to the card.
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Why the card isn't the sale.
A face-value voucher is legally a promise, not a product. The customer has swapped money for the right to buy something later. GST law recognises that: the taxable event is deferred until redemption, when you finally know what was bought. That matters because the redeemed basket decides the GST: GST-free groceries redeem GST-free, taxable goods redeem taxable.
The bookkeeping that follows.
- At sale: the card is recorded as a liability (unearned revenue), not a sale. It shouldn't hit the GST labels on your BAS at all.
- At redemption: ring the purchase through normally (GST on the taxable items, none on the GST-free ones) and reduce the liability.
- Mixed baskets: nothing special; the ordinary rules apply item by item, exactly as if the customer had paid cash.
Vouchers for a specific thing are different.
The redemption rule is for dollar-value cards. A voucher for a specific supply, "one 60-minute massage", "one car detail": can be a taxable sale when the voucher is sold, because you already know what's being supplied. If you sell experience-style vouchers, the GST timing likely sits at the till, not at redemption; worth confirming for your exact product.
Expired and unredeemed cards.
Some cards never come back. When you write unredeemed balances back to income, an increasing adjustment generally brings GST to account on the amount you kept. The tax catches up when the money stops being refundable. If breakage is significant in your business, build the adjustment into your BAS routine rather than discovering it at audit time.
Quick answers.
Do I report gift card sales on my BAS?
Not as taxable sales at the time you sell a dollar-value card. The GST is reported when cards are redeemed. Keep card sales as a liability in your books until then.
What if the customer redeems the card on GST-free items?
Then no GST arises on that part, redemption follows the normal rules of what's bought. A $100 card spent on basic groceries produces no GST at all.
Can I claim a GST credit when I buy gift cards as gifts for clients?
Generally no, buying a face-value card isn't a taxable sale, so there's no GST in the price to claim. Any GST arises later, when the recipient redeems it.
What about cards that expire unredeemed?
When you write the unredeemed value back to income, you generally make an increasing adjustment to bring GST to account on it. Track breakage and adjust on the BAS in the period you recognise the income.
Related guides: When to charge GST · GST on food · Tax invoice requirements · GST on discounts and rebates · GST on entertainment expenses
Retail GST has edge cases. Registration shouldn't be one.
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