Most conferencers and exhibitors provide gamut of services to delegates and exhibitors and it is point of good discussion so as to how the GST shall apply to such concerns. Normally, Following facilities are offered to the delegates in the event at an all-inclusive registration fees:
- Technical Seminars
- Access to exhibition
- Hotel Room Accommodation
- Cultural programs, lunch & dinner
- Airport Pick Up & Drop
The interested local, national & international vendors are offered to participate in the trade fair to showcase and exhibit their products against certain participation charges. Further, various brand promotion packages will be offered to local, national & international vendors in the course of the event.
Issues involved:
I. What shall be the nature of following services and its classification:
a) Services provided by the Applicant to the delegates.
b) Services provided by the Applicant to the exhibitors.
II. In relation to the brand promotion packages offered by the Applicant in the course of the event,
a) What shall be the nature of service and its classification?
b) Whether the Applicant is liable to pay tax on services provided to the brand promoters or the liability to pay tax on such services falls on recipient under reverse charge?
III. Whether Input tax credit (“ITC”) is admissible in respect of tax paid on the following:
a) Services provided by the hotel including accommodation, food & beverages.
b) Supply of food and beverages by outside caterers.
c) Services provided by event manager like pickup & drop, exhibition stall setup, tenting, etc.
Finding Solutions
The Hon’ble AAR, Rajasthan vide Advance Ruling No. RAJ/AAR/2019-20/07 dated May 17, 2019 held as under:
- The services provided by the applicant to the delegates and exhibitors is a composite supply and classifiable under Service Code 998596 having Service description “Events, exhibitions, conventions and trade shows organizations and assistance services”
- The service of brand promotion packages offered by the Applicant in the course of the event is a composite supply and classifiable under Service Code 998397 having Service description “Sponsorship services and brand promotion services”
- Brand promotion packages offered by applicant to partnership firms and body corporate do not fall under the category of sponsorship but purely branding, hence, the Applicant is liable to pay tax under normal charge only (not reverse charge as per Notification No. 13/2017 – CT(R) dated June 28, 2017).
- ITC is admissible to the Applicant in respect of tax paid on the following services and restriction under Section 17(5) of the CGST Act shall not be attracted since the Applicant will be using such inward supply as an element of outward supply of same category taxable as composite supplies :
a) Services provided by the hotel including accommodation, food & beverages.
b) Supply of food and beverages by outside caterers
c) Services provided by event manager like pickup & drop, exhibition stall setup, tenting, etc.
Citation: [TS-509-AAR-2019-NT]
CA, CWM (AAFM-US), CBV, CIFRS, R-ID, B.COM (H), RV* (IBBI)
He is Fellow Chartered Accountant with more than 14 Years of Experience & Qualified Chartered Wealth Manager from AAFM (USA) and Registered Independent Director with IICA (MCA). He has been Published in several media interviews and articles with esteemed forums like Zee News, NDTV India, Hindustan Times, ET, TIOL, Taxmann, Taxguru, Caclubindia. He Can be reached at ankit@gravita.in
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