Is this BTC -> Gift Card -> Product/Service a taxable event?
IMHO, this should not be a taxable event. Here is why...
Do you pay income tax while buying a Gift Card with INR? - NO
Do you pay income tax while buying a Product/Service with Gift Card you received as a gift? - NO
Then, why would you pay any tax in this case? I guess, you should not. This should be true irrespective of the country you are residing in.