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ABC Ltd offers a buy-two-get-one-free scheme on shirts. The 3 shirts are sold for the price of 2 (Rs 2,000). The value of supply for GST is:
ARs 2,000 (the actual amount charged, treating the free shirt as a discount per Sec 15(3)(a))
BRs 3,000 (open market value of 3 shirts)
CRs 2,000 + value of 1 free shirt added
DRs 2,500 (average)
Answer & Solution
Correct answer: A. Rs 2,000 (the actual amount charged, treating the free shirt as a discount per Sec 15(3)(a))
1. Buy-one-get-one-free / 'buy 2 get 1 free' is a single supply of multiple units of goods at a single price (CBIC Circular 92/11/2019-GST).
2. It is NOT a free supply that requires ITC reversal under Sec 17(5)(h) — the discount equivalent is built into the price.
3. Value of supply = Rs 2,000, the transaction value actually charged. The 'free' unit is treated as a discount duly recorded on the invoice (Sec 15(3)(a)).
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Sec 15(3)(a) + CBIC Circular 92/11/2019-GST_
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