Quick Summary
Sponsorship services means when a companies or individuals supports another group or individual to help in exchange for getting advertised with money, goods, or services.
Who is liable to pay GST?
Service receiver is required to pay GST under Forward Charge Mechanism (FCM) or Reverse Charge Mechanism (RCM).
Applicability
- If supplier is other than body corporate and recipient is body corporate & partnership firm - RCM applicable
- If supplier is other than body corporate and recipient is other than body corporate or firm - FCM applicable
- If supplier is body corporate and recipient is other than body corporate or firm - FCM applicable
- If supplier is body corporate and recipient is body corporate & partnership firm - FCM applicable after the 55th GST Council Meeting
GST on Sponsorship Services Registration Limit
- Registration is mandatory if aggregate turnover exceeds Rs.40 lakhs for most businesses.
- For inter-state supply of goods/services, the threshold is Rs.20 lakhs.
Applicable GST Rates
GST on sponsorship services varies:
- 18% for sports events : such as tournaments or sports-related activities.
- 12% for cultural or artistic events : such as music concerts, art exhibitions, or cultural festivals.
Sponsorship services involve a company or individual providing support (money, goods, or services) to another group or individual in exchange for advertising.
The service receiver is liable to pay GST, either under the Forward Charge Mechanism (FCM) or the Reverse Charge Mechanism (RCM).
FCM is applicable when the supplier is a body corporate and the recipient is not a body corporate or firm, or when the supplier is not a body corporate and the recipient is also not a body corporate or firm.
The GST rate is 18% for sports events and 12% for cultural or artistic events.
Registration is generally mandatory if the aggregate turnover exceeds Rs. 40 lakhs. For inter-state supply of goods or services, the threshold is Rs. 20 lakhs.
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