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CA Final · Indirect Tax Laws · Time of Supply

Sundaram Retail Ltd., a registered supplier, sold a gift voucher to a customer on 12 November. The voucher can be redeemed against any goods in any of its stores, so the goods to be supplied cannot be identified when the voucher is issued. The customer redeemed it for a set of utensils on 20 December. What is the time of supply of the goods under the CGST Act, 2017?

The time of supply is 20 December. For a voucher, the time of supply is its date of issue only if the supply is identifiable then; otherwise it is the date of redemption. Because the voucher is redeemable against any goods, the supply is identified only on redemption.

  1. A12 November, the date of issue of the voucher
  2. B20 December, the date of redemption of the voucherCorrect
  3. CThe date on which the next periodical return is due after 20 December
  4. DThe earlier of 12 November and 20 December

Explanation

For vouchers, the time of supply is the date of issue if the supply is identifiable at that point, and the date of redemption in all other cases. Here the goods are not identifiable when the voucher is issued, so the date of issue does not apply. The time of supply is therefore 20 December. The option using 12 November wrongly treats the voucher as identifiable.

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