GST applicabilty on investment outlay
This query is : Resolved
Quick Summary
04 July 2022
Assessee is an LLP Firm in the business of making music videos.
He has approached an investor to invest in his video for completion & distribution of song & in return a % of revenue will be shared with the investor.
Query 1 - Is GST applicable on the above transaction at the time of Investment inflow (for Assessee) & revenue sharing outflow( for Investor), if YES under which HSN code ?
Query 2 - If GST not applicable, then how the same will be shown in BOA at the time of investment incoming & when the revenue start generating (outflows) at the time if sharing of revenue in the said song. for both Investor & Assessee.
He has approached an investor to invest in his video for completion & distribution of song & in return a % of revenue will be shared with the investor.
Query 1 - Is GST applicable on the above transaction at the time of Investment inflow (for Assessee) & revenue sharing outflow( for Investor), if YES under which HSN code ?
Query 2 - If GST not applicable, then how the same will be shown in BOA at the time of investment incoming & when the revenue start generating (outflows) at the time if sharing of revenue in the said song. for both Investor & Assessee.
04 July 2022
1 GST not applicable on investment and on revenue sharing..
2 GST not applicable on such tranfer.
GST only applicable on sale to outsider.
2 GST not applicable on such tranfer.
GST only applicable on sale to outsider.
05 July 2022
The Investor is not investing in the company / LLP, but only in 1 song, so no stakes are given in the LLP.
So how to treat this investment in the books of accounts.
Can't treat as loan as the same is not to be returned back if the revenue is not reached as per estimates.
So how to treat this investment in the books of accounts.
Can't treat as loan as the same is not to be returned back if the revenue is not reached as per estimates.
05 July 2022
Treat it as advance received for making music video. GST applicable on such advance received.
05 July 2022
SAC 999612
1) It would fall under SAC 999612 as Motion picture, videotape, television and radio programme production services.
1) It would fall under SAC 999612 as Motion picture, videotape, television and radio programme production services.
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