GST Circular No 230/2024
This clarification from the Board addresses concerns raised by Indian advertising companies regarding the classification of services provided to foreign clients. Field formations have been treating these services as supplied within India, thereby denying export benefits. The Board, invoking Section 168(1) of the Central Goods and Services Tax (CGST) Act, provides clarity on this matter to ensure consistent application across field formations.
In this circular – following issues has addressed. Issue 1 -Whether the advertising company can be considered as an “intermediary” between the foreign client and the media owners as per section 2(13) of IGST Act?
Issue-2 Whether the representative of a foreign client in India or the target audience of the advertisement in India can be considered as the “recipient” of the services being supplied
by the advertising company under section 2(93) of CGST Act?
Issue-3 Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3)of the IGST Act?
Consequently, in such cases, the advertising company is an “intermediary” in accordance with Section 2(13) of the CGST Act, 2017, as elucidated in Circular No. 159/15/2021-GST dated 20.09.2021, in respect of the said services of facilitating the foreign client and accordingly, the place of supply in respect of the said services provided by the advertising company to the foreign client is determinable as per section 13(8)(b)of IGST Act, i.e. the location of the supplier, i.e. the location of the advertising company.
