Finance Act, 2025-Changes related to Vouchers!

The Finance Act, 2025, has brought significant amendments to the provisions governing the treatment of vouchers under the Goods and Services Tax (GST) framework. These changes, particularly in Sections 12 and 13 of the CGST Act, 2017, clarify that vouchers are not considered a supply of goods or services but are instead categorized as payment instruments. This shift aligns with the recent clarification issued by the CBIC, thereby impacting the time of supply provisions. In this blog, we discuss the key amendments related to vouchers and their implications on GST compliance.

Amendments in Section 12- Time of supply of goods:

​Section 12 of the CGST Act, 2017 specifies the time of supply of goods, determining when the liability to pay GST arises. 

Its sub-section (4) relating to the time of supply in case of supply of voucher is omitted. 

Previously, it was read as follows:

"(4) In case of supply of vouchers by a supplier, the time of supply shall be

(a) The date of issue of voucher, if the supply is identifiable at that point; or

(b) The date of redemption of voucher, in all other cases."

As per Circular No. 243/37/2024-GST, dated 31 December 2024, transactions in vouchers are not considered supplies as vouchers are payment instruments. Therefore, they are actionable claims covered in Schedule III of the CGST Act, 2017.

Therefore, in line with the above clarification issued by CBIC, this amendment omits the time of supply provisions relating to vouchers as it is not considered supply.

Amendment of section 13- Time of supply of services:

Section 13 of the CGST Act, 2017 deals with the time of supply for services. It specifies when the liability to pay GST arises for the supply of services.

Its sub-section (4) relates to the time of supply in case of supply of vouchers is omitted. Previously, it was read as follows:

"(4) In case of supply of vouchers by a supplier, the time of supply shall be

(a) The date of issue of voucher, if the supply is identifiable at that point; or

(b) The date of redemption of voucher, in all other cases."

As per Circular No. 243/37/2024-GST, dated 31 December 2024, transactions in vouchers are not considered supplies as vouchers are payment instruments. Therefore, they are actionable claims covered in Schedule III of the CGST Act, 2017.

Therefore, in line with the above clarification issued by CBIC, this amendment omits the time of supply provisions relating to vouchers as it is not considered supply.

Conclusion

The amendments introduced in the Finance Act, 2025, mark an important shift in the treatment of vouchers under GST. By omitting the time of supply provisions for vouchers in Sections 12 and 13, the law now aligns with the CBIC’s clarification that vouchers are payment instruments and not taxable supplies. This change simplifies compliance and removes ambiguities regarding GST applicability on voucher transactions. Businesses dealing with vouchers must take note of this update to ensure proper tax treatment in their operations.

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