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A retailer sells a prepaid gift voucher that the buyer can later redeem for goods in the retailer's stores. Under the CGST law in force on 10 November 2026, how is the sale of the voucher itself…

Question and options

A retailer sells a prepaid gift voucher that the buyer can later redeem for goods in the retailer's stores. Under the CGST law in force on 10 November 2026, how is the sale of the voucher itself treated?

  1. A supply of goods, taxable in full when the voucher is issued

  2. Neither a supply of goods nor of services; the goods supplied on redemption are taxed

  3. Neither a supply of goods nor of services; the goods supplied on redemption are untaxed too

  4. A supply of services, taxable in full when the voucher is issued

Answer and explanation

Correct answer: B - Neither a supply of goods nor of services; the goods supplied on redemption are taxed

Circular No. 243/37/2024–GST clarifies that a voucher is either money or an actionable claim, and dealings in it are neither a supply of goods nor a supply of services (section 2(52) and entry 6 of Schedule III to the CGST Act, 2017); only the goods or services later supplied against it are taxed. In line with this, the special time-of-supply rules for vouchers in sections 12(4) and 13(4) were omitted from 1 October 2025, so the issue of the voucher is no longer a taxing point. The goods supplied when the voucher is redeemed remain taxable in the ordinary way.

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